| [2018] FWC 3699 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Sham Kumar
v
Fuji Xerox Australia Pty Ltd
(U2018/1020)
COMMISSIONER RIORDAN |
SYDNEY, 17 JULY 2018 |
Application for an unfair dismissal remedy.
[1] Mr Sham Kumar (the Applicant) was employed by Fuji Xerox Australia Pty Ltd (the Respondent) on a permanent basis between 22 April 1996 and 15 January 2018 as a Service Technician in its workshop at Alexandria.
[2] On 15 January 2018, the Applicant was invited to a meeting and advised by Mr Patrick Dunn (the Respondent’s National Order Fulfilment & ANZ Manufacturing Manager) that his position had been made redundant, effective immediately.
[3] The Applicant’s employment is covered by the Fuji Xerox Technical Services Operator Employees Enterprise Agreement 2015- 2018 (the Agreement). The relevant award, which is read in conjunction with the Agreement, is the Business Equipment Award 2010. 1
[4] It is not in dispute that the Respondent did not enter into any consultation with the Applicant or the National Union of Workers (NUW) in relation to the decision to make the Applicant redundant prior to the meeting on January 15.
[5] Whilst the Applicant was represented by the NUW at the telephone conciliation conducted by a Fair Work Commission Conciliator, the Applicant submitted his own submissions and evidence for the Hearing. These submissions were submitted by way of 3 separate emails. The Respondent was represented by Mr Robert Bonotto, the Respondent’s Head of Legal and Compliance and Group Company Secretary. A witness statement was also submitted by Mr Dunn, the Respondent’s National Order Fulfilment and ANZ Manufacturing Manager.
[6] Despite the Directions and Notice of Listing being issued on 30 April 2018, the Applicant failed to attend the hearing on 21 June 2018. As a result, the Fair Work Commission proposed to determine the matter “on the papers” whilst allowing the parties a further 7 days to file any final submissions. Both parties agreed to this course of action.
[7] Final submissions were received by both parties on 28 June 2018.
[8] The Applicant was provided with the following termination letter on 15 January 2018:
15 Jan 2018
Private & Confidential
Sham Kumar
C/O Fuji Xerox Australia
Dear Sham,
This letter is to confirm the details of the discussion that we held with you today on Monday, 15 Jan 2018.
Fuji Xerox Australia (FXA) is undergoing a transformation with the goal of creating a sustainable and profitable future. Based on the review of current and future sales demand plan it is required of us to assess the resource plan to ensure we operate with the most cost-effective structure while continuing to meet our customers’ expectations. There has been a consistent reduction in demand over the last 6-12 months. As the resources for ANZ Hub are directly linked to the demand volume from FXA, the business has dictated after reviewing a need to realign. As a consequence, the decision has been made to reduce headcount. We advised that this means that your role as a Senior Technician will be made redundant as of today Monday, 15 of Jan 2018. By formally informing you today, we are providing you with 5 weeks’ notice which will be paid in lieu.
We advised that you will now enter a redeployment period from today until 22 Jan 2018. During this redeployment period, you are not required to work in the office. As part of this process, we have reviewed open positions within the Company and do not see one that is of equivalent skills and seniority. However, there may be a role which is of interest to you and so you are welcome to apply for any available positions on a merit basis. We have provided a list of these to you in your pack today. If you want to pursue any of these options, please contact Janille Mercurio by no later than, 22 Jan 2018.
We advised that you will have the option to be considered for other redeployment opportunities, however if we are unable to find you a suitable redeployment opportunity, then your role would cease for reasons of redundancy as on 15 Jan 2018 in which you would be eligible for a redundancy package.
Enclosed in this letter are some indicative calculations in relation to what your severance payment would look like in this event. This payment would include a severance payment equivalent to 86.9 weeks, 5 weeks payment in lieu of notice, any outstanding leave owing to you and a payment of any applicable superannuation. This indicative redundancy amount is eligible for concessional taxation treatment based on ATO regulations.
We would also like to extend to you our offer of a 3 months’ outplacement program. A representative from Prima Careers will be in contact with you in relation to this program. Please note that all discussions will remain confidential between you and your Outplacement Consultant.
We would also like to remind you of our Employee Assistance Program referral service which is available to you on 1300 361 008. Optum can provide free and confidential counselling to you during this difficult time.
Finally, I would like to emphasize that this is not a reflection of the effort or contribution you have made to Fuji Xerox.
Yours sincerely,
Patrick Dunn
National Order Fulfilment & ANZ Manufacturing Manager
[9] At the meeting on 15 January 2018, the Applicant questioned why he had been selected for redundancy based on his seniority and expertise in the workplace. The Respondent advised that they had evaluated every employee via a skills matrix (the Respondent calls the matrix the “Technical Judgment Criteria”) and that the Applicant had been evaluated to be in the bottom 5 employees.
[10] The Applicant, along with an official of the NUW, met with the Respondent on 17 January 2018. The Responded provided a redacted copy of the skills matrix to the Applicant and the NUW on 18 January 2018. I note that both the Agreement and the Award are silent in relation to the formation and implementation of a skills matrix for the purposes of selecting employees for redundancy.
“6.d Redundancy
(a) Definition
Redundancy occurs when the company decides that the company no longer wishes the job the Employee has been doing to be done by anyone and this is not due to the ordinary and customary turnover of labour.”
[11] The skills matrix utilised by the Respondent evaluated an employee’s skills and behaviour in relation to the following criteria:
• Values and behaviour;
• Productivity;
• Machines per day;
• Timekeeping;
• Workmanship; and
• Technical ability.
[12] The employees were awarded a rating of either 1 = low/poor, 2 = medium/average, or 3 = high/great for each of these criteria.
[13] The Applicant received a 3 for every criteria except for productivity (2) and machines per day (2). The Applicant’s cumulative score was 16. I further note that two employees received a score of 15, three employees (including the Applicant) a score of 16, fourteen employee a score of 17 and 10 employees a score of 18.
[14] The Applicant received a redundancy payment of 86.7 weeks’ pay plus an additional 5 weeks’ notice.
[15] The Applicant submitted that he was a senior technician with more than 20 years experience. Further, that he was one of the better technicians employed by the Respondent who would rely upon his technical expertise to troubleshoot and rectify difficult and complex repairs in every department at the workplace. The Applicant also submitted that he would write work procedures in his spare time which were utilised by other employees and assisted in the training of other workers and skilled technicians.
[16] The Applicant submitted that he had only received positive reports about his productivity and advised that he always received the monthly and 6 monthly productivity bonuses. The applicant also claimed that it is difficult to undertake an accurate assessment in relation to the number of machines repaired per day on the basis that every fault on each machine is different. Also, due to his specialist skills, the Applicant was required to undertake the more complex and time consuming repairs such as the “dead on arrival” machines. The Applicant also submitted his work log and a breakdown of his extensive competency list on the Respondent’s products.
[17] Finally, the Applicant claimed that he had never been spoken to or counselled in relation to his performance, that his termination was not a genuine redundancy and that his dismissal was harsh, unjust and unreasonable. The Applicant wants to be reinstated.
[18] The Respondent submitted that due to a significant downturn in business, they undertook an assessment of its resources located in its workshop at Alexandria. The Respondent decided to downsize its technical workforce immediately with a view to closing its workshop in late 2018. The Respondent submitted that, following the use of a skills matrix, the Applicant was placed in the bottom five employees working in the workshop.
[19] The Respondent further submitted that, due to a new business model, they were no longer going to perform the highly technical and complex repairs which the Applicant was regularly allocated. As a result, the Applicant’s specialised skill set would not be utilised in the future.
[20] In completing the “F3 – Employer Response to Unfair Dismissal Application”, the Respondent suggested that they were not strictly bound to follow the consultation provisions of the Agreement on the basis that they “were not introducing a major change to production, program, organisation, structure or technology”, likely to have a significant effect on employees.
[21] In their final submissions the Respondent has modified its position in relation to this issue, to advise that it now accepts that it did not comply with the Agreement’s consultative requirements.
[22] The Respondent submitted that the existing workshop at Alexandria will be closed by October 2018. This decision will result in several phases of redundancy between July and October 2018. As a result the Respondent suggested that reinstatement would not be an appropriate remedy.
[23] Finally, the Respondent submitted that, if the Commission is of the view that the payment of compensation to the Applicant is required, then a payment of one or two weeks would be appropriate after taking into consideration the generous redundancy package that the Applicant has already received.
[24] The relevant provisions of the Fair Work Act 2009 (the Act) are:
“381 Object of this Part
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.
Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95.
382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
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.
385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person's dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person's employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”
[25] The effect of s.385(d) of the Act is that if the Commission determines that the dismissal of an employee was a case of genuine redundancy then there is no need to consider whether or not the dismissal was harsh, unjust or unreasonable.
[26] The Explanatory memorandum to the Act states the following:-
“Meaning of genuine redundancy
1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.
1547. Paragraph 389(1)(a) provides that person's dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, project or undertaking.
1548. The following are possible examples of a change in the operational requirements of an enterprise:
• a machine is now available to do the job performed by the employees;
• the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.
1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.
1550. Paragraph 389(1)(b) provides that it will not be a case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.
1551. Subclause 389(2) provides that dismissal is not a case of genuine redundancy if it would have been reasonable in all circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.
1553.Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.”
(my emphasis)
[27] The first issue to determine is whether the Applicant’s employment was a case of genuine redundancy.
[28] The Respondent has made a decision to close its workshop facility at Alexandria. The Applicant, along with six of his colleagues, was made redundant in the first tranche of a redundancy process that will progressively continue up until November 2018. I have taken this into account.
[29] I have taken into account that the Respondent’s business had experienced a significant downturn due to the loss of a major client and that a restructuring of its workshop operations was required in order to sustain the ongoing viability of the business.
[30] I have taken into account that the Respondent has finally acknowledged that it failed to comply with the consultation provisions of the Agreement. Relevantly clause 7.b of the Agreement states:
“7.b Consultation
(a) Where the company has made a definite decision to introduce major change to the production, program, organisation, structure or technology that is likely to have significant effects on employees, the Company shall notify the employees who may be affected by the proposed changes and the Employee’s Representative.
(b) “Significant effects” include termination of employment, major changes in the composition, operation or size of the employer's workforce or in the skills required, the elimination or diminution of job opportunities, promotional opportunities or job tenure, the alteration of the hours of work, the need for retraining or transfer of employees to other work or locations and the restructuring of jobs. Provided that where the Agreement makes provision for alteration of any of the matters referred to in this clause, such alteration shall be deemed not to have significant effect.
(c) Where the Employer is proposing to introduce a change to regular roster or ordinary hours of work of Employees, the Employer must also, as soon as practicable after proposing the change consult with Employees who may be affected. The consultation process will include information about what the Employer reasonably believes will be the effects of the proposed change on Employees and information about any other matters that are likely to affect Employees. The consultation process will also allow the Affected Employees to give their views about the impact of the change, including on Employee's family or caring responsibilities. The Affected Employees can be represented by the Union or Employee Representative throughout the consultation process and such representation will be recognised by the Company.
(d) The Company agrees to recognise an appointed representative for relevant employees, which includes the union.
(e) The company shall discuss with the employees and their representatives, if any, the introduction of the changes, the effects of the changes and measures to avert the adverse effects of such changes on employees and shall give prompt consideration to matters raised by the employees and/ or their union (where appointed) in relation to the changes.
(f) The discussions shall occur as soon as practicable after a definite decision has been made by the company to make changes.
(g) For the purposes of the discussion, the Company will provide in writing to the relevant employees and their representative, if any, all the relevant information about the chance including the nature of the change proposed, information about the expected effects of the change on the employees and any other matters likely to affect the employees.
(h) The Company is not required to disclose confidential or commercially sensitive information to the relevant employees.
[31] In UES (Int'l) Pty Ltd v Leevan Harvey, a Full Bench of the Commission said:
“[39] … However, UES did not consult with Mr Harvey about the redundancy as required by the modern award applying to his employment. The evidence establishes that it would not have been reasonable in all the circumstances for Mr Harvey to be redeployed within the enterprise of UES or the enterprise of an associated entity of UES.
[40] On the evidence, therefore, we consider Mr Harvey’s dismissal was not a case of genuine redundancy within the meaning of s.389. However, this is only because UES did not consult with Mr Harvey about the redundancy in accordance with its obligation in the modern award that applied to Mr Harvey’s employment.” 2
[32] I have taken into account that the Respondent utilised a skills matrix to rank all of its employees. I note that the skills matrix was not compiled with the assistance of the employees or the National Union of Workers. I also note that the score range that was utilised was minimal which has resulted in all employees being within three points of one another. This score range raises doubts to the accuracy and objectivity of the results.
[33] I have taken into account that the Applicant did not choose to take up any of the redeployment options that were identified by the Respondent – who also thought that they were unsuitable.
[34] In accordance with clause 7.b of the Agreement, the Respondent was obligated to consult with the Applicant in relation to his proposed redundancy. This did not occur, a fact now recognised by the Respondent.
[35] Following the obiter in UES v Harvey, I find that the Applicant’s termination was not a case of genuine redundancy due to the Respondent’s failure to consult in accordance with the Agreement.
[36] I now turn to the issue of whether the Applicant’s dismissal was harsh, unjust or unreasonable and the criteria identified in s.387 of the Act which states:-
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(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.”
[37] The phrase “harsh, unjust or unreasonable” was explained by McHugh and Gummow JJ in Byrne v Australian Airlines 3 where they held:
“128. It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[38] In Australian Meat Holdings 4 a Full Bench of the AIRC held, when referring to the extract from Byrne:
“The above extract is authority for the proposition that a termination of employment may be:
• unjust, because the employee was not guilty of the misconduct on which the employer acted;
• unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or
• harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct.”
[39] In Selvachandran v Peterson Plastics Pty Ltd 5 it was held:
“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, common sense way to ensure that the employer and employee are treated fairly.”
[40] It is evident that the dismissal of the Applicant was not due to his capacity or some form of misadventure. The Applicant is obviously a very experienced and highly competent technician. I have taken this into account.
[41] I accept the submission from the Respondent that it had to restructure its business in order to remain viable. Unfortunately, after a significant decline in its workload, the Respondent was left with no option but to reduce the size of its workshop workforce. Without this operational requirement, the Applicant would not have been dismissed.
[42] I find that the Applicant was not dismissed due to his capacity or conduct. I have taken into account.
[43] The Applicant was not notified of a valid reason for his termination relating to his capacity or conduct, I have taken this into account.
[44] The Applicant was not given an opportunity to respond to a reason for his dismissal which related to his capacity or conduct. The Applicant did not see the skills matrix until two days after his termination. I have taken this into account.
[45] The Applicant has not raised any issue in relation to being refused attendance of a support person during the termination meeting. I note that a NUW official attended a meeting with the Applicant and the Respondent two days after the termination. I have taken this into account.
[46] The Applicant was not dismissed for unsatisfactory performance. I have taken this into account.
[47] The Respondent is a large organisation which should not have impacted on the Respondent’s procedures in dismissing the Applicant. I have taken this into account
[48] The Respondent has a dedicated human resources manager. I have taken this into account.
[49] I have taken into account that the Respondent’s lack of consultation in relation to the downsizing of the workforce had a twofold effect. Firstly, there was no capacity or opportunity for the employees or the NUW to offer any alternate suggestions to alleviate the financial burden of the Respondent, eg. the employees may have been prepared to work part time or take annual leave. Secondly, the lack of consultation resulted in a process where the results are based on what appears to be a subjective skills matrix. As a result, the process lacks objectivity.
[50] I have taken into account that the Respondent has not sought any expressions of interest for voluntary redundancy.
[51] I have taken into account the Applicant’s long service and seniority with the Respondent. The Applicant’s evidence that he was specifically chosen by the Respondent to undertake the difficult or complex repairs was unchallenged by the Respondent.
[52] The Applicant should have had the opportunity to challenge the criteria for the skills matrix and his ultimate grading in that matrix. Having worked closely with technicians and electrical tradespeople for 31 years, I find it surprising that the Respondent would, at the initial stage of the employee redundancy process, make redundant one of its most skilful and experienced technicians. I have taken this into account.
[53] I have taken into account that Mr Dunn has worked with the Applicant for the last 23 years. It would be counter-productive for Mr Dunn to allow the Applicant to be in the first tranche of redundancy if the Respondent needed the Applicant’s skills moving forward or if the skills matrix process resulted in an unfair outcome. Mr Dunn’s role requires him to maintain the Respondent’s viability. I accept Mr Dunn’s assessment that the skills matrix was undertaken fairly and that the Applicant’s score reflects his performance. It is not up to the Commission (except in extreme cases of blatant unfairness and subject to any issues of jurisdiction), to stand in the shoes of the employer 6 and categorise or pass judgement on the skills, experience and work ethic of individual members of a workforce.
Conclusion
[54] I have taken into account all of the submissions of the parties in making my determination.
[55] It is now admitted by the Respondent that its failure to consult was the result of ignorance. The Applicant should have been able to rely upon the Respondent being able to read, understand and abide by the provisions of the Agreement.
[56] The Respondent has, in good faith, undertaken a skills analysis utilising an appropriate criteria mix. Whilst the narrow range of scores has resulted in all employees achieving a similar score, I am of the view that it would be procedurally unfair to the other technical employees of the Respondent if the Commission were to simply alter the Applicant’s score in order to engineer a different outcome. I have taken this into account.
[57] Whilst failure to consult will not automatically result in a dismissal being determined to by “harsh, unjust or unreasonable”, due to the circumstances in this case and the reasons provided above, I find that the Applicant’s dismissal was unreasonable.
Remedy
[58] Having found that the Applicant’s termination was unreasonable, I now turn to the issue of an appropriate remedy.
[59] The Applicant is seeking reinstatement to his former position at the Alexandria workshop, continuity of employment and payment for all time since the date of his termination. The Respondent has submitted that a minimal compensation payment would be the most appropriate outcome based on the non-existence of a prescribed timeframe for consultation in the Agreement, the Applicant’s failure to make any effort to mitigate his circumstances and the fact that the Applicant has already been paid 5 weeks’ notice and 86.7 weeks redundancy pay.
Legislative Framework
[60] The relevant section of the Act in relation to remedy are:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
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
(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.”
[61] I have taken into account all of the submissions of the Parties in relation to an appropriate remedy.
[62] Unsurprisingly, the Applicant seeks reinstatement to his old position and back pay for his lost time. The Applicant wants to resume his role as a senior technician of the Respondent.
[63] The Respondent submitted that reinstatement would be inappropriate based on the ongoing downsizing and eventual closure of the workshop. Further, if the Commission were minded to grant the Applicant compensation then that amount should be minimal, based on the length of time it would have taken for the Respondent to comply with the consultation provisions of the Agreement and the very generous redundancy payments that have already been paid to the Applicant.
[64] I have also taken into account that the Respondent has taken a decision to progressively close its Alexandria workshop facility, with a proposed end date of October 2018.
Conclusion
[65] The scoring system for the skills matrix is, in my opinion, flawed due to the narrow bandwidth of the scores. As a result, the Applicant, a senior and highly skilled technician, has obtained what would normally be regarded as a high score (16 out of 18) but is in fact a low score in comparison to his colleagues’ results in the skills matrix. This result challenges the objectivity of the skills matrix but does not result in the process outcomes being void or unsustainable.
[66] Further, but for the lack of consultation as determined earlier, the Applicant’s termination would have been a case of genuine redundancy.
[67] I agree with the submissions of the Respondent and find that it would be inappropriate to reinstate the Applicant to his former role when the Respondent is progressively moving towards closing its workshop.
[68] I find that the payment of compensation is the appropriate remedy. I am inclined to accept the submission of the Respondent that any order for the payment of compensation should reflect the time that it would have taken to consult with the workforce had the Respondent complied with the consultation provisions of the Agreement.
[69] In UES v Harvey, the Full Bench awarded two weeks compensation to Mr Harvey on the basis that:
“[53] … Two weeks is the period it would have taken UES to comply with its obligations in the relevant modern award to consult with Mr Harvey about the redundancy that led to his dismissal.” 7
[70] The Respondent was obligated to consult with its workforce and the NUW. I am of the view that the NUW would have raised concerns about the methodology being utilised by the Respondent in relation to the skills matrix, in particular the compressed assessment scoring. I find that it would have likely taken the NUW and the Respondent one week to resolve their skills matrix issues.
[71] I find that proper consultation in relation to the future of the Respondent’s workshop at Alexandria would have taken a further two weeks. The employees and the NUW were denied the opportunity to discuss alternate arrangements, as highlighted earlier, in an attempt to delay the need for the closure of the workshop or the downsizing of the workforce.
[72] I have taken into account all of the provisions contained in s.392(2) of the Act in reaching my decision. I am satisfied that three weeks’ pay is the appropriate level of compensation to be paid to the Applicant on the basis that the Applicant would have received this amount of pay had he not been unfairly dismissed. I am satisfied that the Respondent has the capacity to pay this amount.
[73] The Applicant was not involved in any misconduct. The amount ordered to be paid does not include a payment for the Applicant’s shock and distress at being terminated. I note that three weeks’ pay does not exceed the Act’s compensation cap.
[74] The Applicant was entitled to participate fully in the consultative process as provided for in the Agreement. As a result, I find that a payment to the Applicant of three weeks’ pay, plus superannuation, by the Respondent is the appropriate remedy to the Applicant’s unfair dismissal claim.
[75] I so Order.
COMMISSIONER
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3 (1995) 185 CLR 410.
4 (1998) 84 IR 1.
5 (1995) 62 IR 371.
6 [1996] IRCA 267.