DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jody Tuchin
v
Mills Brands
(U2019/6365)

Application for an unfair dismissal remedy — jurisdictional objection — whether dismissal is a case of genuine redundancy within the meaning of s.389 of the Fair Work Act 2009 — employer failed to comply with the consultation provisions of the Storage Services and Wholesale Award 2010 — employee pregnant — whether pregnancy a reason for dismissal —dismissal not a genuine redundancy — not a sham redundancy — dismissal unfair — compensation ordered

Introduction

[1] On 10 June 2019, Ms Jody Tuchin (Applicant) lodged an application for an unfair dismissal with the Fair Work Commission (Commission). The Applicant claims she was unfairly dismissed by her former employer, Mills Brands Pty Ltd (Respondent), on 5 June 2019.

[2] On 10 July 2019, the Respondent lodged a response to the Applicant’s claim, in which the Respondent denied that the Applicant was unfairly dismissed. Further, the Respondent raised a jurisdictional objection, being that the dismissal was a case of ‘genuine redundancy’ within the meaning of s.389 of the Fair Work Act 2009 (Act).

[3] On 4 October 2019, I held a hearing in Sydney regarding both the jurisdictional objection, and the Applicant’s substantive claim. In attendance was the Applicant, who appeared for herself. Ms Alisha Dyson (Solicitor, Kemp & Co Lawyers) appeared with permission for the Respondent.

[4] Having considered the parties’ submissions and evidence provided prior to and during the hearing, I have determined that the Applicant’s dismissal was not a genuine redundancy within the meaning of the Act. Further, I also find that the dismissal was unfair, and that compensation is an appropriate remedy in the circumstances.

[5] My reasons for dismissing the jurisdictional objection, and granting the Applicant an unfair dismissal remedy, follow.

Legal representation

[6] The Respondent sought to be represented by Ms Dyson prior to and during the hearing. The Applicant did not oppose this application. I granted the Respondent permission to be legally represented generally in this matter. I did so having had regard to the criteria in s.596 of the Act, specifically noting that this matter pertains to a jurisdictional objection (which is, by its nature, inherently complex). 1

Respondent’s case in support of genuine redundancy, and in opposition to the Applicant’s substantive claim

Respondent’s submissions as to the factual background

[7] On 10 August 2015, the Applicant commenced employment with the Respondent on a full-time basis. The Applicant’s employment contract stipulates that the Applicant was appointed to the position of “Customer Service Representative”.

[8] The Respondent submits that it restructured its enterprise. As a result of the restructure, the Applicant's work duties were allocated to another two employees. To that end, the respondent says that, “the work performed by the Applicant was no longer required” and that the Commission should treat the dismissal as a genuine redundancy.

[9] The Respondent submits that the process to effect the Applicant’s redundancy was as follows:

a) On 1 March 2019, the Applicant's direct supervisor resigned from his position as Warehouse Manager at Penrith. Mr Nathan Jackson took over this role, and became the Applicant's direct supervisor from that date;

b) On the same day, Mr Jackson made an announcement to all the employees at the Penrith site that structural changes would be occurring (March Meeting);

c) On 23 April 2019, Mr Jackson had a discussion directly with the Applicant. Mr Jackson and the Applicant discussed the Applicant's daily tasks and the structural changes that were occurring generally within the Company (April Meeting);

d) On 21 May 2019, Mr Jackson orally advised the Applicant of the potential for her role to be made redundant. Mr Jackson said that the Company would 'try its best to find her [the Applicant] another position' (May Meeting);

e) On 5 June 2019, the Respondent says that the Applicant was invited to a meeting whereby the Applicant was advised that she could bring a support person. While the Applicant declined the offer of a support person, the Respondent says that the Applicant nonetheless attended that meeting (June Meeting); and

f) During the June Meeting, the Respondent says that the Applicant was advised of the following:

•  her role was being made redundant;

•  that she was to be provided with a letter notifying her of redundancy, and subsequent termination of employment;

•  that forthwith, she would not be required to return to the workplace.

[10] In support of the Respondent’s position regarding genuine redundancy, the Respondent relied upon a letter dated 5 June 2019, which is addressed to the Applicant and signed by Mr David Mills (Chief Executive Officer) (Termination Letter). The content of the Termination Letter goes to Applicant’s redundancy, and that her employment is to be terminated on that basis, effectively immediately.

[11] At the time of the Applicant’s dismissal, the Applicant was paid an annual salary of $70,000.00 (plus superannuation).

Evidence

[12] The Respondent filed two signed statements of Mr Jackson (23 August Statement and 13 September Statement respectively (collectively Jackson Statements)). At the hearing, the Respondent called Mr Jackson as a witness and sought to rely on the Jackson Statements. As such, I take the Jackson Statements to be Mr Jackson’s evidence-in-chief, in which Mr Jackson gives evidence that during:

•  the March Meeting, Mr Jackson made the restructure announcement to the team at the Penrith workplace, being the workplace that the Applicant was employed at to carry out her duties. In particular, Mr Jackson said that the announcement was in regard to “structural changes that were and would be occurring”;

•  the April Meeting, Mr Jackson spoke with the Applicant about her “daily tasks” and “the structural changes that were happening within the company”; and

•  the May Meeting, the Applicant “was made aware [by Mr Jackson] of a possible redundancy of her job and that the company will try its best to find her another position”.

[13] In cross-examination by the Applicant, Mr Jackson gave the following evidence:

•  at the time of the restructure announcement, the Respondent was determined to go through a restructure “due to a … significant change in management” in the months prior, 2 but that the Applicant was not told about the impact that such change would have on her job specifically because the Respondent did not know what was (or was not) required for the business at that time;3

•  during the April Meeting, Mr Jackson said that “[t]he fact the company was restructuring was brought up again within that meeting a couple of times”. 4 Further, and on that point, Mr Jackson said:

“A restructure of a business is a restructure of a business. The way that you [the Applicant] understand that is not really up to me to - if you weren't sure what a restructure meant, at no point did you ask anybody exactly what the restructure meant. I'm not a mind reader, I don't know if you understand what was going on at that point in time …”; 5

(my emphasis)

•  regarding the May Meeting, Mr Jackson said that the restructure was discussed, and that Mr Jackson told the Applicant that her job could become redundant. 6 I asked Mr Jackson what words were used, to which Mr Jackson said:

“Off the top of my head, we were having a discussion in regards to her role, what was within it, again. We'd had this discussion a couple of times. The fact that the company was restructuring was brought up again and that at that point her role may become redundant. I don't know if they're the exact words that I used, but it was, you know, a few months ago”; 7

(my emphasis)

•  Mr Jackson said that notes were taken by a colleague who witnessed the discussion, Ms Maher. 8 Mr Jackson accepted that those notes were not put into evidence;9

•  the review of the business was not carried out “in any formal” way but as a point of discussion during board meetings. Further, Mr Jackson acknowledged that those board meetings would have been documented, but no evidence of those meetings or documents were put into evidence; 10 and

f) regarding redeployment, Mr Jackson says that he “looked within the business to see what roles were there” but ultimately “[t]here was no other roles within the business”. 11 More specifically, Mr Jackson attests that there were reductions in headcount across a number of different divisions within the Respondent’s enterprise.12 Mr Jackson referenced a site supervisor role at the Seven Hills worksite, but said that this role would not have been available to the Applicant because it was filled at the time of the Applicant’s redundancy, and in any event, Mr Jackson was of the belief that the Applicant did not have the requisite skillset to perform that role.13

Applicant’s case in opposition to genuine redundancy and in support of her substantive claim

[14] Prior to the hearing, the Applicant tendered a document titled “Applicant’s Submissions and Response to the Respondent’s Submissions” (Applicant’s Statement). In conjunction with the evidence adduced by Ms Dyson in cross-examination, and having regard to the Applicant’s Statement, I understand the Applicant’s evidence to be as follows:

•  the Applicant was pregnant at the time of dismissal, and the Respondent had been made aware of that pregnancy several months prior;

•  Mr Jackson treated the Applicant “unfairly” on multiple occasions, such as:

•  an unannounced change in her working hours (which affected her ability to attend doctor’s appointments pertaining to her pregnancy);

ii. email correspondence from Mr Jackson to the Applicant being “accusatory”, and “blaming” her for matters outside of her control;

iii. on 29 May 2019, Mr Jackson verbally “reprimanding” the Applicant after the Applicant sought to double check conflicting instructions given by Mr Jackson and another more senior employee of the Respondent; and

•  regarding the March Meeting, the Applicant says that Mr Jackson’s statements were to the effect of, “I'm the new manager, this is what I hope for the business. I hope we can all get along and make this business a better business”; 14

•  regarding the April Meeting, the Applicant says that she met with Mr Jackson, in which they discussed the specifics of the Applicant’s role. The Applicant says she understood the meeting was only to allow Mr Jackson to determine what processes she had been following; 15

•  regarding the May Meeting, the Applicant says that she met with Mr Jackson and Ms Maher. Relevantly, the following exchange occurred in cross-examination:

“MS DYSON: So what was this discussion on 21 May, three people, yourself and Ms Maher and Mr Jackson, only the three of you?

APPLICANT: Yes. So again that was around procedures and how labelling of the products, the pallets and things were done and we had a lot of lost stock and there was a process around how we tracked the lost stock, so I believe that meeting was around tracking the lost stock, as there was a new financial controller that had come on board and this was shortly after a stocktake was done.

MS DYSON: So you say there was no discussion about redundancy or organisational change or anything of that nature?

APPLICANT: Obviously it was known that there was changes within the business, because previous managers had left and Mr Jackson had come on board. Ms Maher's role had changed from being in charge of the Asia Pacific side to I think maybe general manager, so it was known that there were management changes but absolutely no talk about my potential redundancy. I mean I was pregnant, so if there was any thought in my mind that I wouldn't have a job then I would have gone into damage control and would have either been looking for something else, in case that happened, or you know, putting plans in place in case that happened, because like I didn't know anything about it until that morning”. 16

(my emphasis)

•  regarding the June meeting, the Applicant says this discussion was the first occasion in which ‘redundancy’ was mentioned. The Applicant confirms that during the June Meeting she received the Termination Letter;

g) the Applicant denied the Respondent’s assertion that she rejected the opportunity to have a support person present at the June Meeting. Instead, the Applicant says that she would have had a support person present if she had been given the opportunity to do so. 17 Moreover, the Applicant says that she was not aware of the purpose of the June Meeting prior to it occurring, with the possibility of her termination only becoming apparent when she was handed the Termination Letter (and “given a couple of minutes to read it”).18 Once the Applicant read the letter, the Applicant says she was handed a box, and instructed to clear her desk before being escorted off the worksite;

•  regarding the duties that made up the Applicant’s role, the Applicant says the following:

“My role was one that sort of encompassed a whole bunch of stuff, from the time that I started there. There was a lot of ad hoc duties, but primarily I was in charge of a lot of admin stuff and the containers that would come into the yard with the stock in them, arranging for the container crews to unload those containers for the stock to be brought into the warehouse and for keeping track of, I guess, the ins and outs of what left the warehouse and what came into the warehouse”; 19

•  further, the Applicant says that she primarily worked at the Penrith worksite (save for the first three months of her employment, and other odd occasions thereafter, when she worked at the Seven Hills worksite). 20

Relevant law regarding a genuine redundancy

[15] Section 385 of the Act qualifies a claim for unfair dismissal:

“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.”

[16] Before the Commission can consider issues of harshness, etc, sub-para.396(d) of the Act requires the Commission decide whether the dismissal was a case of genuine redundancy:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

[17] Section 389 provides the statutory definition as to what qualifies as a genuine redundancy:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[18] In view of s.389 of the Act, and for the Commission to be satisfied that the matter was a genuine redundancy, there are three questions that need to be answered:

•  Was the Applicant’s job no longer required to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise?

•  Did the Respondent comply with any obligation in a modern award that applied to the employment to consult about the redundancy?

•  Would it have been reasonable in all the circumstances for the Applicant to be redeployed within the employer’s enterprise?

[19] I turn to consider these questions.

Was the Applicant’s job no longer required to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise?

[20] As stated above, sub-para.389(1)(a) of the Act provides that a person’s dismissal was a case of genuine redundancy if 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.

[21] These words have long been used and applied in industrial tribunals and courts as a practical definition of redundancy. 21 The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will be a case of genuine redundancy:

“1547 Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548 The following are possible examples of a change in the operational requirements of an enterprise:

•  a machine is now available to do the job performed by the employee;

•  the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

•  the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists”.

(emphasis added to highlight relevance)

[22] It has been held that a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee”. 22 It has also been held that:

“what is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant”. 23

[23] The Applicant’s case, in summary, is that the Respondent’s determination to make her role redundant was disingenuous. The Application’s position is that the real reason for the business restructure was not because of any business need. Instead, the Applicant argues that the termination was because the Applicant had become pregnant and, after a number of incidents that the Applicant describes as bullying behaviour (which the Applicant claims was an effort by the Respondent to have her resign), the Respondent arbitrarily resolved to redistribute her duties to other employees.

[24] I do not need to have recourse to Respondent’s submissions to dispense with the Applicant’s arguments on this point. The state of the evidence is insufficient for me to find that the Applicant was made or otherwise selected for redundancy because of her pregnancy. Beyond that, in this matter, sub-para.389(1)(a) of the Act does not require that the Commission “look behind” the reasons in selecting a person for redundancy (save, maybe, in circumstances where it could be said those reasons demonstrate that there were not any changes in the operational requirements of the Respondent’s enterprise). The decision to restructure a business is a matter that falls squarely within managerial prerogative.

[25] It is not disputed that the Respondent sought to change its operations viz a reduction in employees. The Applicant was not the only staff member whose employment was terminated as a result of changes to the business. Further, the duties once performed by the Applicant have been redistributed to other employees. Indeed, the Applicant acknowledges her duties survived the restructure. However, the fact that ‘duties’ survive a restructure is not to the point. The issue is whether the Applicant’s job survived (which it did not viz the lower headcount).

[26] I accept that the Applicant’s job (being the total sum of her duties) was no longer required to be performed by anyone. I also accept that the reason for this redistribution was because of the Respondent’s decision to restructure its operations. Therefore, I find that sub-para.389(1)(a) of the Act is satisfied.

Did the Respondent comply with any obligation in a modern award that applied to the employment to consult about the redundancy?

[27] The parties agree that the Applicant's employment was covered by the Storage Services and Wholesale Award 2010 (Award).

[28] Clause 9.1 of the Award states:

“If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:

(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and

(b) discuss with affected employees and their representatives (if any):

(i) the introduction of the changes; and

(ii) their likely effect on employees; and

(iii) measures to avoid or reduce the adverse effects of the changes on employees; and

(c) commence discussions as soon as practicable after a definite decision has been made”.

[29] Clause 9.2 of the Award states:

“For the purposes of the discussion under clause 9.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:

(a) their nature; and

(b) their expected effect on employees; and

(c) any other matters likely to affect employees”.

[30] By admission, the Respondent acknowledges that it has not provided written notice in accordance with cl.9.2. 24 The failure of the Respondent to comply with this Award obligation could be said to result in a failure to satisfy sub-para.389(1)(b) of the Act, and a dismissal of the jurisdictional objection. However, the Respondent has sought to rely on a decision of Commissioner Foggo in Tyszka v Sun Health Foods Pty Ltd (Sun Health Foods).25 In that case, the Commissioner found that the respondent employer had complied with the consultation requirements under an industrial award despite not having complied with that award’s requirements.26

[31] I do not take Sun Health Foods to stand for a general principle that the requirement of consultation can be reached if an employer has the “intention” to consult, as the Respondent has suggested. 27 I say this for two reasons. Firstly, Commissioner Foggo put aside the employer’s failure to abide by one award requirement (i.e. written notice) in circumstances where the employer had regular contact with the relevant employees and, as a matter of fact, made an effort to orally consult staff (and did so over an extended period of time). The Commissioner’s ratio in that matter is more nuanced than the Respondent submits, and I do not propose to follow it here.

[32] Secondly, in my opinion, an obligation imposed on a person or persons under an Award should not be treated as a mere guideline, suggestion, or a “maybe”. Award obligations are legal obligations made under statute and hold such status. They are obligations that must be complied with and, when they are not, the legal consequences of their breach must flow. While I am not saying that Sun Health Food is wrongly decided, I do query the extent to which a technical Award obligation can be put aside because a related, broader substantive requirement has been met. In any event, however, Sun Health Food is a decision that turns on its own facts.

[33] In this matter, the Respondent says that it consulted with the Applicant at either/or the March Meeting, April Meeting, May Meeting, or June Meeting. I do not accept those submissions. I now turn to consider each meeting, and explain why that is so.

[34] In regard to the March Meeting, the Respondent’s submissions and evidence go no further than to suggest that Mr Jackson made a general comment to a large cohort of staff, and that his comments were intended to foreshadow changes to the business. No specifics were given regarding what these changes were, who they may affect, and how they may be introduced. Alone, this comment does not satisfy the requirements of the Award.

[35] In regard to the April Meeting, Mr Jackson said that he discussed the Applicant’s role and wider changes to the business. The Applicant’s evidence is the same. Again, what is missing is any specificity about how the changes may affect the Applicant. That Mr Jackson thought that the Applicant would infer that the general mention of a restructure meant that her job could be impacted belies the Respondent’s claim that the requisite consultation occurred. The Award consultation provisions do not put any onus on an employee to make inquiries of their employer as to the specifics of a proposed restructure. Instead, the onus falls entirely on the employer to give information to the employee about how the restructure may affect them. Mr Jackson’s oral evidence on this point cannot be said to satisfy the Award.

[36] In regard to the May Meeting, Mr Jackson’s oral evidence was that he specifically mentioned that the restructure may affect the Applicant’s role. Mr Jackson said as much in cross-examination, and claimed that there were notes taken to that effect during the May Meeting. Should this evidence be accepted then the Award obligations may have been satisfied. However. I do not accept the Respondent’s evidence on this point for two reasons. Firstly, the notes referred to by Mr Jackson were not produced into evidence. Further, the person who apparently took these notes, Ms Maher, was not called as a witness. Secondly, I do not accept Mr Jackson’s oral evidence on this point to be a reliable. Mr Jackson’s demeanour in the witness box was not forthright. His answers to questions (especially my questions) on the May Meeting discussions were not direct, but vague and incomplete. I therefore do not accept Mr Jackson’s account regarding what occurred during the May Meeting.

[37] Instead, I accept the Applicant’s oral evidence regarding what was said during the May Meeting. The Applicant’s answers to the questions put to her were consistent. Further, her behaviour was direct, and I accept her answers as honest and reliable. In view of the foregoing, I do not accept that the Respondent satisfied the consultation requirements under the Award at the May Meeting.

[38] Finally, regarding the June Meeting, I accept that the Applicant first learnt of the impact that the restructure would have on her role at this meeting. Advising an employee that they have been made redundant is not consultation (or at least not consultation within the meaning of the Award). Consultation is to be a meaningful exercise, not a perfunctory one. 28 The dialogue between an employer and an employee ought to afford a proper opportunity to discuss the impact that a relevant significant change will have on an employee, and the employer must consider (though not necessarily accept) the employee’s concerns and/or proposed alternatives. Above all, the outcome of the restructure must not be preordained at the time the consultation takes place. Yet, as the Termination Letter demonstrates, the decision to terminate the Applicant had been made before the Applicant had any opportunity to consult with the Respondent. For this reason, I do not accept that the events that occurred at the June Meeting, nor the contents of the Termination Letter, satisfy the Award.

[39] From the above, it is clear that there was no proper consultation between the Applicant and the Respondent. Clauses 9.1 and 9.2 of the Award have not been complied with. The Applicant’s termination was therefore not a case of ‘genuine redundancy’ because of the Respondent’s failure to satisfy sub-para.389(1)(b) of the Act.

Would it have been reasonable in all the circumstances for the Applicant to be redeployed within the employer’s enterprise?

[40] Sub-section 389(2) of the Act provides that a person's dismissal cannot be a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise. If I am found to be wrong regarding sub-para.389(1)(b) of the Act, the Respondent still needs to satisfy this provision in order to establish that the Applicant’s termination was a genuine redundancy. As such, I will consider the application of this provision to the matter at hand.

[41] The highest, binding interpretation of sub-s.389(2) remains that stated in Ulan Coal Mines Limited v A. Honeysett & Ors: 29

“[26] [Subsection 389(2)] must be seen in its full context. It only applies when there has been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of genuine redundancy the employer has a complete defence to the application. Section 389(2) places a limitation on the employer’s capacity to mount such a defence. The defence is not available if it would have been reasonable to redeploy the employee. The exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances.

…

[28] … [T]he question posed by s.389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered”.

(emphasis added)

[42] The Applicant did not lead any evidence or make submissions on this point. However, the Applicant did press the point in cross-examination with Mr Jackson, whose evidence was that there was no alternative position. I accept Mr Jackson’s evidence in this regard. Therefore, I do not conclude that there was an alternative role for the Applicant to undertake.

Relevant law regarding whether a dismissal was harsh, unjust or unreasonable

[43] With the Respondent’s jurisdictional objection having been dismissed, the question I need to answer is whether the dismissal was harsh, unjust or unreasonable. 30 Section 387 of the Act provides what matters must be taken into account in determining whether a dismissal was harsh, unjust or unreasonable:

“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.”

I turn to consider these factors.

Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?

[44] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”, and should not be “capricious, fanciful, spiteful or prejudiced”. 31 Further, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.32

[45] The Applicant appears to submit that the reason she was selected for redundancy was because of a discriminatory (and therefore invalid) reason. More specifically, the Applicant submits that the Respondent dismissed her because she was pregnant. The Applicant’s submission rests upon the circumstances leading up to her termination, being that she was “harassed” by Mr Jackson and that such harassment was a means to “push” the Applicant out of the business (i.e. that the harassment was to coerce the Applicant into resigning). Further, the Applicant submits that the decision to retain another employee in lieu of the Applicant demonstrates the discriminatory reasoning, as the other employee was not as strong a performer when compared to the Applicant (and was not pregnant).

[46] I understand the Respondent’s position to be that the reason for the Applicant’s dismissal was because her job had been made redundant. The Respondent denies that the Applicant’s pregnancy was a factor in selecting her for dismissal.

[47] While it may be that a dismissal resulting from redundancy may not be a ‘genuine redundancy’ within the meaning of the Act (as is the case here), the dismissal may nonetheless occur because the job was made redundant in the ordinary course. I accept that the only reason for the Applicant’s dismissal was because of redundancy, which is a “valid” reason because it is sound, defensible and well-founded in circumstances where the Respondent’s enterprise made wide-sweeping changes to its workforce.

[48] As previously stated, I do not accept the Applicant’s submission that the reason, or part of the reason, for her dismissal was because of her pregnancy. Equally, I do not accept the assertion that the reason she was selected for redundancy was motivated by a failed effort to coerce the Applicant into resigning. While the Applicant’s evidence demonstrates that there was a poor relationship between Mr Jackson and herself, and that Mr Jackson took issue with the manner in which the Applicant carried out her duties, the status of that relationship does not ground the submission(s) being made.

[49] In summary, I accept there was a valid reason for the dismissal, and that such reason did not go to either the conduct or performance of the Applicant. This point leans against a finding that the dismissal was harsh, unjust and/or unreasonable.

Was the Applicant notified of the valid reason?

[50] As per the Full Bench decision in Crozier v Palazzo Corporation Pty Ltd, 33 notification of a valid reason must take place before any decision to terminate an employee in order to provide the employee with an opportunity to respond to the reason identified.

[51] As has already been established, the Applicant learnt of the reason for her termination (i.e. redundancy) when she received the Termination Letter. While the consultation requirements provided under the Award do not directly apply here, the Respondent was nonetheless required to notify the Applicant of the redundancy before terminating her employment. The dialogue that is meant to occur is not just a technical requirement under the Award; notification and consultation are matters of procedural fairness. The Applicant was not given an opportunity to discuss alternatives, the impact the redundancy would have on her, or consider employment options outside of the Respondent’s enterprise.

[52] The failure to notify the Applicant of the reason for her termination prior to its execution weights in favour of a finding that the dismissal was both harsh and unjust.

Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?

[53] As stated above, the reason for termination did not go to the Applicant’s conduct or capacity. This factor is a neutral consideration and does not bare any weight on my ultimate findings.

Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?

[54] As noted by the Full Bench of the Fair Work Commission, “[t]he subsection is not concerned with whether or not the employee was informed that he or she could have a support person present”. 34

[55] The Applicant submits that she was not made aware of the June Meeting prior to it occurring. The Applicant submits Mr Jackson and another employee came to the Penrith worksite, approached the Applicant unannounced, and provided her the Termination Letter. The Applicant relies on her oral testimony and evidence adduced in cross-examination.

[56] The Respondent denies the Applicant’s version of events. Instead, the Respondent submits that the Applicant was invited to attend a meeting and that she declined to have a support person present at that meeting. The Respondent relies on the written and oral testimony of Mr Jackson.

[57] On balance, I prefer and accept the Applicant’s evidence and submissions on this point. I do so having had regard to the demeanour and responses given by the Applicant and Mr Jackson during cross-examination, and the concerns I have expressed about the credibility of some of Mr Jackson’s responses.

[58] Whilst the Respondent did not expressly deny the Applicant a right to have a support person present, the sudden manner in which the June Meeting was executed denied the Applicant that right. I also accept that the Applicant would have chosen to bring a support person, had the opportunity been presented.

[59] This finding weighs in favour of a finding that the dismissal was harsh and unjust.

Was the Applicant warned about unsatisfactory performance before the dismissal?

[60] Again, the reason for termination did not go to the Applicant’s conduct or capacity. This factor is a neutral consideration and does not bare any weight on my ultimate findings.

To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal? To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

[61] While the Act recognises that “small business are genuinely different in nature both organisationally and operationally”,   ³⁵ it does not follow that such an employer’s procedures in effecting a dismissal can be entirely devoid of fairness. Further, the absence of dedicated human resource management specialists does not relieve an employer of extending an appropriate degree of courtesy to its employees “even when implementing something as difficult and unpleasant as the termination of a person’s employment”. 36

[62] Despite the Respondent’s assertions that it is a “small business”, I do not accept that is the case. Mr Jackson’s evidence alone suggests that there are at least 26 employees employed across multiple divisions (even after the restructure). The Respondent operates multiple teams across at least two worksites. There are reporting lines between managers, supervisors, and general staff. While it may be fair to refer to the Respondent as a “smaller” business, it is clearly a more sophisticated operator than the Respondent suggests.

[63] I note that I was neither made aware of the existence, nor absence of, a dedicated human resources or other similar specialist employee within the Respondent’s organisation. Nonetheless, and having regard to my comments above, I find that the considerations required under para.387(f) and (g) of the Act to be neutral considerations in this case. The size of the Respondent’s enterprise neither imposes an expectation of a higher standard, nor does it relieve the Respondent of its obligations to provide employees with procedural fairness.

What other matters are relevant?

[64] Neither party made any specific submissions on this point. That said, I note that the Applicant was pregnant at the time of the dismissal, and that the Respondent was aware of that fact. The harshness of the dismissal is only compounded when one considers the impact the abrupt announcement of redundancy and termination would have on an employee only some months before she is due to give birth. The Applicant is effectively denied the right to maternity leave, and other entitlements that would have otherwise been available to her (that no doubt would have assisted her (and her family) at such a crucial time).

[65] As the Applicant said herself, had she at least been consulted in the months prior when her job was purportedly being considered for redundancy, she may have been able to obtain alternative employment (or at least prepared herself for a change in circumstance). That the Respondent has failed to properly consult with an employee who is more-so reliant on the requisite consultation obligations, than someone who is not pregnant is, in my opinion, the very definition of “unfair”.

Was the Applicant’s dismissal was harsh, unjust or unreasonable?

[66] In view of the above, I find that the Applicant’s dismissal was both harsh and unjust.

Remedy

[67] The Applicant does not seek reinstatement, nor do I consider it appropriate given the total breakdown in the employment relationship. The issue thus turns to whether compensation should be awarded and, if so, its quantum.

[68] Section 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement:

“392 Remedy—compensation

…

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”.

Effect of an order on the viability of the Respondent’s enterprise

[69] The parties made no submissions on this issue. It is therefore a neutral consideration in that there is no evidence of an order for compensation having an effect on the viability of the Respondent’s enterprise.

Length of the Applicant’s service

[70] The Applicant was employed by the Respondent for a period of just under 4 years. The parties made no submissions on this issue. It is therefore a neutral consideration in this matter.

Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed

[71] As stated by a majority of the Full Court of the Federal Court in He v Lewin: 37

“In determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination”. 38

[72] Given that my findings as to the unfairness of the Applicant’s termination rest solely upon the Respondent’s failure to properly consult over redundancy (i.e. as opposed to the redundancy being a ‘sham’), my assessment of the remuneration the Applicant would have been likely to receive (but for her unfair dismissal) is limited to the period that proper consultation would have likely taken. In the facts and circumstances of this case, I consider that proper consultation with the Applicant would have extended to no more than three calendar weeks.

Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal

[73] The parties made no submissions on this issue. It is therefore a neutral consideration in that there is no evidence of the Applicant failing to mitigate her loss over the three-calendar week period of remuneration to be awarded.

Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation

[74] There is no evidence that the Applicant received any remuneration over the three-calendar week period of remuneration being awarded. I therefore make no reduction in the period awarded.

Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation

[75] The parties made no submissions on this issue, nor is there any evidence on same. It is therefore not a consideration I give any weight to in this matter.

Contingencies & Shock, distress etc. disregarded

[76] I have applied no reduction due to contingencies. I also confirm that, as required by the Act, the lost remuneration amount to be ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the Applicant by the manner of her dismissal.

Calculation of compensation

[77] As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries: 39

“[t]he well-established approach to the assessment of compensation under s.392 of the [Act] … is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket [(Sprigg)]. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages”. 40

[78] The approach in Sprigg is as follows:

•  Step 1: Estimate the remuneration the Applicant 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; and

•  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.

[79] Applying Steps 1 to 4 of Sprigg, I have elected to settle on a gross amount of $4,026.00 ($70,000.00 gross annual salary divided by 52.14 weeks = $1,342.00 gross per week), plus an amount of $362.00 superannuation (9.5 percent of $4,026.00).

Is the amount of compensation to be reduced on account of misconduct?

[80] If I am satisfied that any misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct. Given I do not make any findings of misconduct by the Applicant, I make no reduction in this regard.

Conclusion

[81] The fatal issue for the Respondent may be summarised as an abject failure to properly consult with the Applicant prior to the decision to terminate her employment. While I accept that the Respondent terminated the Applicant on the grounds of redundancy, the Respondent’s failure to comply with the Award obligations to consult (and, more broadly, failing to afford the Applicant even a modicum of procedural fairness) has denied the Respondent recourse to enliven s.389 of the Act as a jurisdictional defence. Further, and for the reasons described above, the manner in which the Applicant was made aware of her redundancy, and the sudden notification of her termination, renders the dismissal harsh and unjust.

[82] Orders will be made to the following effect, to be published separately in due course:

a) The Respondent’s jurisdictional objection is dismissed.

b) The Respondent is pay to the Applicant the gross sum of $4,026.00 (subject to applicable taxation as required by law) by way of electronic funds transfer into the Applicant’s nominated bank account.

c) The Respondent is to pay into the Applicant’s nominated superannuation fund the sum of $362.

d) Orders (b) and (c) above must be complied with within 14 days of the date of the orders made.

DEPUTY PRESIDENT

Appearances:

The Applicant appeared for herself.

Ms Alisha Dyson (Solicitor, Kemp & Co Lawyers) appeared for the Respondent.

Hearing details:

A hearing was held in Sydney on 4 October 2019.

Printed by authority of the Commonwealth Government Printer

<PR716417>

 1   CEPU v UGL Resources Pty Limited (Project Aurora) [2012] FWA 2966 at [23] (Richards SDP).

 2   Transcript PN243.

 3   Transcript PN244 toPN246.

 4   Transcript PN249.

 5   Transcript PN249 to PN251.

 6   Transcript PN264.

 7   Transcript PN272.

 8   Transcript PN264.

 9   Transcript PN281 to Transcript PN283.

 10   Transcript PN279 to PN280.

 11   Transcript PN266 to PN268.

 12   Ibid.

 13   Transcript PN269.

 14   Transcript PN157 to PN158.

 15   Transcript PN159 to PN161.

 16   Transcript PN168 to PN169.

 17   Transcript PN170.

 18   Transcript PN171.

 19   Transcript PN173.

 20   Transcript PN175.

 21   Ulan Coal Mines Limited v Henry Jon Howarth & Ors [2010] FWAFB 3488 at [15] (Boulton J, Drake SDP, and McKenna C), citing R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Cooperative Limited (1977) 16 SASR 6; Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115; Short v F.W. Hercus Pty Limited (1993) 40 FCR 511.

 22   Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308 (Ryan J), cited with approval in Ulan Coal Mines Limited v Henry Jon Howarth & Ors [2010] FWAFB 3488 at [15] (Boulton J, Drake SDP, and McKenna C).

 23   Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308 (Ryan J), cited with approval in Ulan Coal Mines Limited v Henry Jon Howarth & Ors [2010] FWAFB 3488 at [17] (Boulton J, Drake SDP, and McKenna C). See also: Dibb v Commissioner of Taxation (2004) 136 FCR 388; [2004] FCAFC 126 at [43]-[44] (Spender, Dowsett, and Allsop JJ).

 24   Transcript PN299.

 25   [2010] FWA 1781.

 26   Ibid at [63].

 27   Transcript PN301.

 28   CEPU v Vodafone Network Pty Ltd, PR911257 (AIRC, Smith C) at [25]. See also: CFMEU v Newcastle Wallsend Coal Company, Print R0234 (AIRCFB, Ross VP, MacBean SDP, Deegan C) at [78]–[80], [(1998) 88 IR 202]; cited in Steele v Ennesty Energy Pty Ltd [2012] FWA 4917 (Jones C) at [20].

 29   [2010] FWAFB 7578 (Giudice J, Hamberger SDP, and Cambridge C); CEPU v QR Ltd (No 2) [2010] FCA 652 at [49].

 30   Fair Work Act 2009 (Cth) s.385.

 31   Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (2000) IR 371 at 373.

 32   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685.

 33   Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C) at [39].

 34   Jurisic v ABB Australia Pty Ltd [2014] FWCFB 5835 at [84].

35 Williams v Top Image Hair Design [2012] FWA 9517 at [40].

 36   Sykes v Heatly Pty Ltd t/a Heatly Sports PR914149 (AIRC, Grainger C) at [21].

 37   [2004] FCAFC 161.

 38   Ibid at [58].

 39   [2016] FWCFB 7206 at [16].

 40   Ibid at at [16], citing Sprigg v Paul’s Licensed Festival Supermarket (1988) 88 IR 21 and Bowden v Ottrey Homes Cobram and District Retirement Villages [2013] FWCFB 431.