DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mrs Robyn Vosper
v
Solibrooke Pty Ltd T/A Angie's Cake Emporium
(U2015/12264)

Termination of employment – small business code.

[1] Ms Vosper worked for Cakes by Karen from 24 October 2012 until the sale of the business to Solibrooke Pty Ltd on 3 July 2015 and then until her dismissal in September 2015. The appointment letter provided by the incoming employer and signed by Ms Vosper confirms there was no break in service and no significant change in work duties or conditions following the transfer of business. She was a permanent part time employee working 24 hours per week plus reasonable additional hours when required.

[2] A number of witness statements were provided by both parties in this case but only two were available for cross examination. As the statements of the others deal with contested facts I have not had regard to their statements. The owner of the business Mr Martin and the Applicant, Ms Vosper gave evidence and were subject to cross examination.

[3] At the time of the transfer of business Ms Vosper was paid out her 82 hours of accumulated annual leave entitlements. The former owner wrote to the new owner on 16 June 2015 stating “Robyn has now requested that I pay her out in full, so everything is done and she starts fresh with you guys.” I am satisfied that “she starts fresh with you guys” means nothing more or less than that she will start to accumulate entitlements such as annual leave fresh with the new employer.

[4] Solibrooke witnesses refer to a meeting which the new owners had with the employees of Cakes for Karen on 30 June 2015. At that meeting Mr Martin says that the employees were advised that they would be offered employment with the new owners on the same rates of pay, hours and conditions and that their entitlements would not carry over. 1 Ms Vosper gave evidence that at no stage prior to the sale of the business was she told verbally or in writing that her service would not be recognised.

[5] Mr Martin gave evidence that employees were told that any accrued entitlements would cease and that they would be employed on new contracts.

[6] The letter which is dated 30 June 2015 which was signed and agreed to by Ms Vosper on that date says that employment is offered when the sale of the business has been completed and that the role and terms of employment, hours of work and rate of pay will remain unchanged and that employees will be asked to sign a new contract over the next week. The letter stated that by signing the attached form the employees were confirming that they will be available to start work from the date of purchase. The letter says nothing about service or entitlements.

[7] The Fair Work Act 2009 (the Act) provides that

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and
(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and
(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and
(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[8] There is no doubt that Ms Vosper is a transferring employee in relation to a transfer of business. Assets and employees transferred. The new employer did not inform Ms Vosper in writing before the new employment started that a period of service with the old employer would not be recognised. The fact that accrued annual leave was paid out and employees were told by the new employer that entitlements were not transferring is a completely separate and unrelated matter to the issue of recognition of service for the purposes of Section 384 of the Act.

[9] I am satisfied that Ms Vosper had more than 12 months continuous service and is therefore protected from unfair dismissal.

[10] It is not in dispute that Ms Vosper was dismissed at the initiative of the employer and that the employer is a national system employer and her employment was covered by the General Retail Industry Award 2010. It is also not in contest that Solibrooke is a small business employer.

[11] Ms Vosper was notified at a meeting after completion of her shift at 6pm on 21 September 2015 that she was being dismissed from her part time employment and she was being given one week’s notice. Under the NES Ms Vosper was entitled to two weeks’ notice. Ms Vosper was offered ongoing casual employment on a lower base pay rate (excluding casual loading). The rate of pay offered was less than the minimum award rate. Ms Vosper was told that her part time role was “not in line with the business staffing needs.” Ms Vosper advised the employer that she did not wish to accept the offer of casual employment.

[12] On the morning of 22 September 2015 Ms Vosper sent a facebook message to her sister Ms King “my suspicions about being forced to casual were right. Last night I was given a week’s notice on my part time job and offered a casual position.” Ms King, the former owner, replied “How rude. Have you spoken to Fair Work about if they’ve done it the right way? Also did you get your headset?” Ms Vosper responded: “I have to drive.”

[13] On the same day Ms Vosper posted a private facebook message as follows:

“I just wanted to let you know that I am finishing up at Angie’s at the end of the week. Time to move on with a new focus. Thanks for all the hard work you have given Karen and I.” the reply asked “what happened” and Ms Vosper responded “Angie and Lloyd did my 3 months review and explained that they no longer want to have the part time position and gave me a weeks notice. They offer me casual however I have decided to move on.”

[14] On the same day Ms Vosper’s sister, the former owner, then messaged one of the other employees “Hey do you mind if I ask if everything is ok at work!?? Robyn isn’t being treated very well at all. And I was just hoping you were doing ok!”

[15] Mr Lloyd then sent a letter by email at about 9.30pm that night, 22 September 2015 to Ms Vosper. The attached letter was dated 22 September and advised Ms Vosper that she was being terminated without notice as of 21 September 2015. He stated: “you have left us with no alternative but to terminate your employment with immediate effective due to you breaching our request for Confidentiality less than 24 hours after specifically discussing this with you during your review yesterday evening. At the review we made it clear that any discussion with anyone about anything to do with the business that could be seen as derogatory, in particular you sister with whom we were experiencing difficulties at present with but we were doing everything we can to not involve with you. We all acknowledged this may be a conflict of interest for you. You thanked us for our understanding and you assured us that this would not be a problem. We clearly pointed out that failure to adhere to our request in confidentiality would not be tolerated. We clearly pointed that this is important to us and highlighted this in section 5 of the Letter of Engagement R Vosper.dox that we gave you at the review.” The letter of engagement was the offer of casual employment. It contains a standard confidentiality provision not to “use or disclose confidential information relating to the business of the employer, including but not limited to client lists, trade secrets e.g. recipies, procedures, processes and pricing structures”.

[16] There was no discussion between the owners and Ms Vosper between the meeting when she was advised that she was being dismissed with notice on 21 September 2015 and the sending of the dismissal letter by email on the evening of 22 September 2015. Ms Vosper gave uncontested documentary evidence to support her evidence that she did not make any other calls to her sister during this period. I accept this evidence.

[17] The relevant section of the small business code is as follows:

“Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.”

[18] I am not satisfied that the dismissal could possibly be consistent with the code for the following reasons.

[19] Ms Vosper advised others on her facebook page that:

● “She had been dismissed from her employment because the new owners had told her that they no longer want to have the part time position and she was being forced to casual.
● She had been given her one weeks notice .
● She had been offered casual employment but had decided to move on.”

[20] There is nothing derogatory in these statements. There is no confidential business information in these statements. No reasonable person could believe that this information was either derogatory or confidential business information. An employee has a right to complain about their employment rights and their treatment at work. We do not live in a society where employees are prohibited from discussing their employment status or their treatment at work with others.

[21] Mr Lloyd did not discuss with Ms Vosper his concerns that Ms Vosper may have made derogatory remarks or released or used confidential business information. There does not appear to have been any reasonable basis for his concerns. It is hard to see what is derogatory or offensive in Ms Vosper’s sister stating to another employee that “Robyn isn’t being treated very well at all.” The statement is an expression of opinion which in the circumstances is not fanciful or outrageous. A decision by an employer to dismiss a part time employee and then offer them casual employment on its face could be perceived as the employee not being treated very well at all. Even if there were sound business reasons for the decision there is nothing derogatory or outrageous in a person expressing such an opinion. Mr Lloyd had no basis without further inquiry to assume that the sister’s statement had been provoked by a derogatory statement by Ms Vosper. Mr Lloyd could not reach a reasonable conclusion about this matter without talking to Ms Vosper.

[22] Even if there was a reasonable basis for Mr Lloyd’s concern I doubt that it could constitute serious misconduct. The statement is not so serious as to constitute a repudiation of the employment relationship particularly during the notice period. The statement is not seriously harmful to the business. Just because a business dismisses an employee and others become aware that an employee is unhappy about that, it does not usually mean that others will not want to work for that employer.

[23] The summary dismissal was not in accordance with the small business code.

[24] In the circumstances of this case it is necessary to determine if the first dismissal with notice was fair. If the first dismissal was fair then Ms Vosper would only have been employed for the period of her statutory notice entitlement, that is a further two weeks. If the first dismissal was not fair then the period of employment if the dismissal had not occurred would have been longer.

[25] The employer argues that Ms Vosper was made redundant. The evidence of Mr Martin is that the business wanted to alter the working hours of employees to fit business needs. A part time workers hours can be changed by agreement. It is not clear that Ms Vosper was asked to change her hours. Some administrative duties were reallocated to the new owners. However, it is not clear that these changes are so substantial as to render the position no longer being required to be performed by anyone.

[26] Mr Martin raised a number of performance concerns. The issues were an incident of lateness and also the level of Ms Vosper’s cake making and decorating skills. Mr Martin told Ms Vosper at the termination meeting on 21 September 2015 that Ms Vosper’s customer service skills were appreciated and that they were willing to provide further training in cake making to Ms Vosper. I accept the evidence of Ms Vosper that the issue of the lateness incident was not raised at the termination meeting. There is no suggestion that Ms Vosper was formally warned that her employment was at risk due to poor performance and she was not provided with any opportunity to improve and the offer of further training only occurred at the time of the dismissal. There is no basis for finding that termination of employment was due to performance and if it was it was clearly not consistent with the small business fair dismissal code. In respect to “other dismissal”; there was no warning, no opportunity to improve, no statement that this was a reason for proposed dismissal and no opportunity to respond. I am also satisfied that the evidence does not support a finding that there was a valid reason for termination based on poor performance.

[27] In respect to the issue of redundancy both witnesses were questioned about the extent of change in duties that had occurred since the takeover of the business. I am satisfied that:

● Prior to the takeover of the business the new owners made it clear that they would require less administrative work from Ms Vosper as the new owners were proposing to take on more of this work.
● Prior to the takeover Ms Vosper performed sales or counter duty along with other employees, she also performed administrative work and she performed cake decorating work.
● In the period prior to the takeover the previous owner provided Ms Vosper with training and additional duties in cake making and decorating in anticipation of the reduced administrative duties following the takeover.
● After the transfer of business Ms Vosper did not perform the following duties which were performed by her prior to the takeover: stock ordering, closing the shop, shop merchandising, and cashing up.
● After the transfer of business Ms Vosper performed a reduced amount of serving in the shop, supervision, and opening of the shop. She performed quoting for cakes only in conjunction with the new owner whereas she had done this job by herself before.
● Ms Vosper continued to perform work creating “edible images”. Mr Martin says that this work was reduced but Ms Vosper denies this occurred during the period of her employment.
● Ms Vosper agreed to alter her working hours to meet business needs including working earlier and later and on different days when required. Management also allowed some variations to meet Ms Vosper’s personal needs.
● Not long after the transfer of business Mr Vosper was told by one of the owners that they might look to shifting to use casual rather than part time employment at some stage in the future. Ms Vosper told the owners that she was willing to work hours that were needed and that she could arrange childcare when needed.

[28] At the meeting on 21 September 2015 Mr Martin accepted that the changes which had occurred in Ms Vosper’s duties were not discussed in any great detail. Ms Vosper denies that they were discussed at all.

[29] Mr Martin agreed that he came to the meeting having made a decision that Ms Vosper’s part time employment was to end for reasons of redundancy and that she was to be offered casual employment under different conditions. The reason for this decision was that the business required the primary work of cake making and decorating to be done over a range of working hours and they wanted to be able to organise these hours flexibly to meet the needs of the business. They did not believe that permanent part time employment was a model which provided this flexibility and hence they wanted to employ Ms Vosper on a casual basis. Mr Martin gave evidence that the weekly hours of the persons who have been engaged to replace Ms Vosper to perform the serving in the shop and cake making and decorating work hours vary from week to week. Mr Martin gave evidence that he did not believe that Ms Vosper was available to work on a regular or guaranteed basis early in the morning or in the evening due to her childcare responsibilities.

[30] Mr Martin also accepted that the changes in Ms Vosper’s work role occurred from the time of the transfer of business. Ms Vosper had been performing the changed duties during the period from the transfer of business. This reinforces that the main reason for the dismissal was the desire of the new owners to have more flexibility in allocation of working hours. Mr Martin accepted that the work Ms Vosper had been performing in cake decorating and making and in customer service still needed to be done.

[31] I am satisfied that the new owners decided to change the way in which working hours were distributed to better meet the needs of the business. This could be a genuine basis for a redundancy. However, I am not satisfied that there was consultation about the proposed redundancy. I am satisfied that if there had been appropriate consultation the meeting of 21 September 2015 would have discussed the changed needs of the business in more detail and Ms Vosper would have been asked what her capacity to meet changed hours requirements was. The option of some fixed regular hours supplemented by some flexible hours performed by Ms Vosper and other employees including casual employees would have been explored. Ms Vosper was not asked at the meeting if she would agree to changed hours. Assumptions based on past conversations were not appropriate given that an employee may have a different response when faced with the possibility of losing their permanent job. I am not satisfied that the employer was open to different solutions or measures to mitigate the impact on Ms Vosper. The requirements of the consultation clause of the Award was not met.

[32] As the requirement of the consultation clause was not met it was not a genuine redundancy.

[33] Although it is not necessary to determine this question, I am also satisfied that redeployment to other working hours may have been a possible outcome had consultation occurred.

[34] The termination was not a genuine redundancy and for the reasons discussed earlier when dealing with the performance issues, the dismissal was not in accordance with the “other dismissal” section of the small business code because of the absence of warning and an opportunity to respond to the proposal to terminate for reasons of performance or conduct.

[35] The Act requires that I consider the following matters:

“In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(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.”

[36] For the reasons discussed earlier there is no valid reason for the dismissal due to conduct or performance. Ms Vosper was told that the reason for dismissal was redundancy so she was not notified of a reason relating to conduct or performance or given an opportunity to respond. Ms Vosper was aware of the dismissal when it took effect. There was no warning about conduct or performance or opportunity to respond. I accept that the small size of the business and the lack of any human resource management expertise did have an impact on the manner of the dismissal.

[37] The other matters that I have taken into account are:

● The fact that the new owners were seeking to make changes to the arrangement of employee working hours to meet the changed needs of the business.
● The fact that Ms Vosper had demonstrated that she was willing to make changes to her working hours to accommodate the needs of the business during the period since the transfer of the business.
● The length of employment of Ms Vosper of less than three years was neither particularly long or particularly short.
● There were no instances of misconduct established.
● If there had been appropriate consultation other arrangements to meet the needs of Ms Vosper and the business may well have been arrived at.

[38] Taking all of these factors into consideration the size of the business and the lack of human resource management expertise and the business requirement to move to reorganise working hours does not outweigh the lack of a valid reason for termination and the lack of procedural fairness. I am satisfied that the termination of employment was unfair in that it was unjust and unreasonable.

[39] Ms Vosper does not seek reinstatement. I accept her evidence that there has been irretrievable damage to the relationship. I consider that reinstatement would not be appropriate and that it would be appropriate to make an order for compensation.

[40] The Act requires that I consider the following:

“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
(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.”

[41] There was no submission that any order I might make would affect the viability of the enterprise. The length of service, having regard to the industry, is neither long nor short.

[42] I estimate that Ms Vosper would have remained in employment for at least eight further weeks if the dismissal had not occurred. I have concluded such a short period because:

● Although I accept Ms Vosper’s evidence that she was prepared to adapt to the needs of the new owners, I am satisfied that the new owners were suspicious of Ms Vosper because their relationship with the former owner, Ms Vosper’s sister, was strained. Given the size of the business this was a significant factor.

● Although I consider that Mr Martin exaggerated the level of concern about Ms Vosper’s performance and skills and I accept that Ms Vosper was keen and able to learn, the new owners negative attitude towards Ms Vosper was likely to affect the length of her future tenure in the business.

[43] I accept the evidence of Ms Vosper that she has been actively seeking work each day since about two weeks after the termination. She has not been successful but she has made adequate efforts to mitigate her loss. She has sought to establish a party plan business but I accept her evidence that at this stage her expenses have exceeded her earnings.

[44] The only earnings from employment since the dismissal was 16 hours notice pay made following the conciliation conference in this matter.

[45] I do not consider that there will be any earnings during the period between the making of this order and the payment of compensation.

[46] There is no allegation of misconduct, apart from the alleged breach of confidentiality which I am satisfied has no basis, and as a consequence no deduction is made for misconduct.

[47] There is no need to make deduction for contingencies as the earnings in the two months since the dismissal are well known and the other factors are relatively certain.

[48] The compensation to be ordered is eight weeks pay less 16 hours already paid or 176 hours pay at $23 per hour plus 9.5% superannuation. The total amount is therefore $4,432.56.

[49] I will order that the amount be paid less appropriate taxation within 21 days. I will provide the employer with liberty to apply to vary the payment period. The order is published separately.

COMMISSIONER

Appearances:

Ms R Vosper represented herself.

Mr L Martin appeared for the Respondent.

Hearing details:

2016

Morwell

February 22

 1   Submission of Solibrooke at para 2.

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