| [2022] FWC 2254 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Shane Riley
v
NSW Aboriginal Education Consultative Group Incorporated
(U2022/699)
COMMISSIONER CAMBRIDGE |
SYDNEY, 25 AUGUST 2022 |
Unfair dismissal - no valid reason for dismissal related to capacity or conduct - redundancy - significant procedural deficiencies - advice of dismissal sent by email - absence of notification and consultation regarding redundancy - no payment made in respect to NES entitlements for notice period or redundancy - dismissal harsh, unjust and unreasonable - compensation provided.
[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was lodged at Sydney on 12 January 2022. The application was made by Shane Phillip Riley (the applicant) and the respondent employer is NSW Aboriginal Education Consultative Group Incorporated ABN 29 271 072 930 (the employer or NSW AECG).
[2] The application indicated that the date that the applicant’s dismissal took effect was 22 December 2021. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) (a) of the Act.
[3] The matter was not resolved at conciliation, and during a Pre-Hearing Conference/Conciliation held on 11 April 2022, the Commission confirmed that the requirements of s. 596 of the Act had been satisfied, and permission was granted for either Party to be represented by lawyers or paid agents. Subsequently the matter has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted at Mudgee on 28 June 2022.
[4] At the Hearing the applicant represented himself, and he provided evidence as the only witness called in support of the unfair dismissal claim. The employer was represented by Mr M Foran, barrister, instructed by Everingham Solomons Solicitors. Mr Foran introduced evidence from the employer’s President, Ms C Trindall, who was the only witness called in support of the employer’s case opposing the applicant’s unfair dismissal claim.
[5] The applicant had worked for the employer for about one year and eleven months. The applicant was employed in a position described as a Wiradjuri Language Educator. The applicant was initially engaged under a contract of employment document that noted that his employment would commence on 20 January 2020, for 35 hours per week, and continue up until 18 December 2020. The applicant’s employment was continued past 18 December 2020, on the basis of 35 hours per week and payment of $40 per hour.
[6] The employer operates a public benevolent institution which relevantly conducts programs involving the delivery of Aboriginal Language and Cultural education. The employer is not a small business, and at the time of the dismissal of the applicant it had 26 “full-time” (35 hours/week) and 22 part-time employees. The language education services provided by the employer are conducted from seven regional hubs, one of which is located in the New South Wales regional city of Dubbo, where the applicant was based.
[7] The employment of the applicant and other Aboriginal Language Educators was enabled through funding provided by the NSW Department of Education. In July 2021, the newly elected President of the NSW AECG, Ms Trindall, held a virtual meeting with staff involved in the delivery of Aboriginal Language Education programs. During this meeting, Ms Trindall advised inter alia, that the funding provided by the NSW Department of Education was not sufficient to enable continuation of the current level of service delivery. Ms Trindall advised that certain measures to reduce costs associated with payment for travel, and the hours paid to language educators would need to be implemented. Further, Ms Trindall advised that the NSW AECG would approach the NSW Department of Education seeking to increase and extend the funding arrangements.
[8] On 10 September 2021, the Treasurer of the NSW AECG, Ms Dennis, sent an email to the Management Committee of the employer which relevantly advised that the NSW AECG was in a dire financial situation and that severe expenditure constraints would need to be implemented and that the NSW Department of Education should be approached to seek additional funding to provide a financial “rescue package”. On 24 September 2021, Ms Trindall sent a letter to the NSW Department of Education which requested additional funding to support the organisation until the end of December 2021. In this letter, Ms Trindall advised the NSW Department of Education that the NSW AECG was operating on a financial shortfall of $1.5 million, and a request was made for an “untied financial grant” of $1.2 million.
[9] On 23 November 2021, Ms Trindall held a virtual meeting with Aboriginal Language Education staff including the applicant. During this meeting Ms Trindall provided information about the ongoing financial difficulties faced by the NSW AECG, and she advised that all Aboriginal Language Education staff would have their employment contracts cease at the end of December. On the same day, 23 November 2021, Ms Trindall again wrote to the NSW Department of Education, and she reiterated the ongoing financial difficulties that were faced by the NSW AECG. In this letter to the NSW Department of Education, Ms Trindall stated,
“As of the 22 December, all Aboriginal Language Educators currently employed with the NSW AECG have been stood down along with all leave entitlement owed to them.” 1
[10] On 14 December 2021, Ms Trindall sent an email to Aboriginal Language Education staff including the applicant. This email appeared to be a response to various messages and other communications which had raised concern about the ongoing employment of language educators. In summary, the email of 14 December 2021, referred to the ongoing financial difficulties and that the funding shortfalls meant that the existing hours of work provided to language educators could not be continued. In addition the email stated that “… all language educators who will be employed with the NSW AECG will need to reapply through the due process, noting there may be a delay to when the language classes can start.” 2
[11] At 8:09 am on 21 December 2021, Ms Trindall sent an email to the applicant which relevantly stated:
“Hi Shane
As discussed during the TEAMS meeting on Tuesday, 23 November 2021, attached is your termination letter as Language Educator for the North West Wiradjuri Language & Culture Nest.”
[12] The termination letter that was attached to this email was dated Monday, 20th December 2021, and it relevantly stated:
“As you are aware all Aboriginal Language Educators with the NSW Aboriginal Education Consultative Group (NSW AECG) North West Wiradjuri Language & Culture Nest employment contracts will cease on Wednesday, 22nd December 2021.
Based on changes to our service agreement with the Department of Education (DoE) it was apparent that the current structure was unsustainable both to the organisation and the Aboriginal Languages and Culture Nests.
All your leave entitlements will be paid out with your final pay.
On behalf of the NSW AECG, I wish to acknowledge your work and commitment that you have given to your communities, the organisation and to the North West Wiradjuri Language & Culture Nest.
…
Let me once again personally thank you and if you are reapplying to join us, I will see you in 2022.” 3
[13] Apparently, letters that were similar to the termination letter that was provided to the applicant by email on 21 December 2021, were also sent by email to other language educators. Further, although accrued leave entitlements were paid to the applicant, there was no payment made in respect of the absence of two weeks’ notice of termination as required by both s. 117 of the Act and as a stipulated term in the applicant’s contract of employment document. Further, the applicant was not paid the four weeks redundancy pay entitlement arising under s. 119 of the Act.
[14] Following the termination of his employment, the applicant successfully secured alternative employment which commenced on 31 January 2022, and for which he has been paid remuneration greater than that he received whilst employed by the NSW AECG.
[15] The applicant provided written submissions which included a mixture of assertions of fact and submission material. The applicant submissions document was admitted as evidence and marked as Exhibit 2. In addition to the submission material contained in Exhibit 2, the applicant provided oral submissions during the Hearing. The applicant said that his dismissal was harsh and unreasonable.
[16] The applicant submitted that he had been dismissed unfairly when, three days before Christmas, he was given 24 hours’ notice of being sacked, and that notice was provided by email. The applicant stated that he believes that his termination of employment was unfair and harsh because of the lack of formal notification and the lack of correspondence before he received the termination letter by email the day before his employment finished.
[17] The submissions made by the applicant also asserted that his dismissal was unjust, unfair and in breach of s. 117 of the Act. The applicant said that he believed that his dismissal was unfair because it was not executed in the right way and further, he believed that he was entitled to redundancy pay which had not been provided.
[18] The applicant also said that he thought it was pretty harsh when he got a letter on the 21st saying that he was being terminated on the 22nd after having no previous conversations which involved any explanation of the changes that occurred. The applicant also said that the timing of his dismissal being just before Christmas, was harsh because it was difficult for him to look after his family at a time when it was very difficult to find any other employment. The applicant made submissions which complained about the absence of any communication personally directed to him about his contract before he received the termination letter.
[19] The applicant submitted that he was seeking compensation as remedy for his unfair dismissal.
[20] The employer provided a written outline of submissions document which was supplemented by oral submissions made by Mr Foran during the Hearing. The employer submitted that the dismissal of the applicant was not unfair, harsh, or unreasonable and that the application for unfair dismissal remedy should be dismissed.
[21] The employer submitted that during the virtual meeting held on 23 November 2021, the employer gave the applicant, and other language educators, notification of its intention to terminate the employment of language educators. The employer’s submissions asserted that there were two difficulties with the way in which the applicant sought to prosecute his case.
[22] Firstly, the employer submitted that if the applicant’s termination was on account of genuine redundancy, then the applicant did not have access to the unfair dismissal provisions of the Act. Secondly, the employer submitted that even if the applicant was successful in establishing that he had been unfairly dismissed, the proper measure of compensation would not lead to an Order of payment for any more than two weeks’ pay given that his notice period was two weeks under both s. 117 of the Act and the employment contract.
[23] Consequently, according to the submissions made by the employer, as the employer had been prepared to pay two weeks to the applicant as settlement of his unfair dismissal claim, the Commission should not permit the applicant to prosecute a case when the remedy that he sought had been offered to him on an open basis.
[24] The oral submissions made by Mr Foran examined the significant financial difficulties that the employer confronted which essentially meant that the contract that the applicant was on for 35 hours a week at $40 an hour, was only funded to the extent of three hours per school. However, according to the submissions made by Mr Foran, this circumstance did not represent a redundancy because the job of the applicant continued albeit that it could only be tied to the level of funding involving three hours per school.
[25] The further oral submissions that were made by Mr Foran acknowledged that there was no evidence of notice in writing prior to 8:09 am on 21 December 2021. Further, Mr Foran acknowledged that under both s.117 of the Act and the employment contract, two weeks’ notice was required. Therefore Mr Foran submitted that any compensation would be constrained to payment for two weeks.
[26] Mr Foran further submitted that by way of application of the “Sprigg formula” the employment of the applicant would not have continued beyond and the two weeks’ notice period. Therefore, Mr Foran submitted that in the event that the applicant established that he had been unfairly dismissed, any compensation would be limited to the two weeks’ notice period.
[27] In summary, the submissions made by the employer asserted that the applicant was not entitled to any remedy because his dismissal was not harsh, unjust, or unreasonable. The employer submitted that the applicant had been dismissed when the employer had determined that the job that the applicant performed could no longer continue in the absence of funding to support the position involving payment for 35 hours per week. Further, the employer submitted that any procedural deficiency which would have been remedied if notice in writing had been given, would mean that the applicant would not be entitled to any more than a further two weeks payment.
[28] The unfair dismissal provisions of the Act relevantly include s. 385 which stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. Section 385 is in the following terms:
“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.”
[29] In this case, as the employer had not asserted that the dismissal was a case of redundancy, whether a genuine redundancy or otherwise, there was no dispute that the matter was confined to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable.
[30] Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust, or unreasonable. Section 387 of the Act is in the following terms:
“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.”
[31] In this instance, the applicant was dismissed because the employer determined that it had insufficient funds to continue the employment of the applicant (and other language educators). The evidence unequivocally established that the dismissal of the applicant was in no way connected with any capacity or conduct issue on the part of the applicant.
[32] The employment of the applicant (and 25 other language educators) was established upon contracts that stipulated essentially “full-time” employment based on a minimum payment for 35 hours per week. The employer had identified that its funding arrangements and other income sources that were generated directly from individual schools, were insufficient to sustain the continued employment of language educators engaged on a 35 hours per week basis. Consequently, the dismissal of the applicant (and the other language educators) was for reason of the financial incapacity of the employer.
[33] The evidence has confirmed that the financial incapacity of the employer was the only reason for the dismissal of the applicant. The employer determined that it could simply no longer continue to pay the applicant (and the other language educators) to perform the job of a “full-time” language educator. The termination of the applicant’s employment in these circumstances represented a redundancy. The employer, for financial reasons, determined that it would no longer require the applicant’s job to be performed by anyone.
[34] The prospect that the applicant and other language educators could apply to be re-employed at some point in the future and presumably on less than a “full-time” (35 hours per week) basis, does not mean that the job of the applicant (and the other language educators) continued to be required. It was clear that the “full-time” job of a language educator, in this case, the job performed by the applicant for almost two years, was no longer required to be performed. The employer’s attempted reliance upon the potential for some re-employment of the applicant in the role of a language educator but presumably for significantly lesser hours per week, as the basis to recharacterize the dismissal of the applicant to not represent a redundancy, was a fundamental misconception.
[35] It appeared that the employer has consciously sought to declare that the dismissal of the applicant (and the other language educators) did not represent a redundancy circumstance as a means to avoid payment of the statutory entitlements that arise in respect of dismissal for reason of redundancy. Specifically, the employer has steadfastly maintained that the dismissal of the applicant was not a redundancy and therefore he was not entitled to redundancy pay in accordance with s. 119 of the Act. The position adopted by the employer was plainly erroneous, and the manner in which it has acted in maintaining its opposition to any contemplation of the redundancy circumstance of the dismissal of the applicant, was a highly regrettable and unconscionable attempt to avoid payment of entitlements provided by the National Employment Standards (NES).
[36] The employer introduced evidence that it had acknowledged and accepted that it had failed to make payments to the applicant in respect to notice entitlements arising under both the NES and the contract of employment. However, rather than rectifying its failure to provide the applicant with the entitlements that were due upon termination of employment, the employer openly disclosed that it had attempted to settle the applicant’s unfair dismissal claim by proposing to make payment of these due entitlements, and it steadfastly resisted any further financial consideration. The shameless approach of the employer whereby it sought to use unpaid NES entitlements as a bargaining chip to settle the applicant’s unfair dismissal claim was both disturbing and distasteful to observe, particularly in circumstances where the employer has been legally represented from the outset of these proceedings.
[37] Consequently, the dismissal of the applicant was not for any reason, valid or otherwise, that related to the applicant’s capacity or conduct. The reason for the dismissal of the applicant was that the employer determined that it no longer had the financial capacity to continue the job that the applicant (and other language educators) performed. In these circumstances, the applicant was dismissed for reason of redundancy.
[38] The employer provided notification of the reason for the applicant’s dismissal by email communication. Communication of the advice of dismissal by electronic means such as email or text message, should generally be avoided. Unless there is some compelling reason like extensive distance or genuine safety concern, advice of dismissal from employment is a matter of such significance that it should be conveyed in person.
[39] In this instance there may have been some justification in providing the termination letter by email because of the distance between the employer’s management office in the Sydney suburb of Stanmore and the applicant’s employment base being Dubbo. However, there was no justifiable reason why the applicant was not personally contacted by telephone or videoconference before he received an email that informed him that his employment was to be terminated on the following day. In such circumstances, the notification of dismissal by email, without any prior personal communication, and which advised that the employment would end with one days’ notice, was unnecessarily callous, unreasonable, and in breach of s. 117 of the Act.
[40] The applicant was not dismissed for any reason related to his capacity or conduct. Therefore this factor is irrelevant to the circumstances of this case.
[41] This factor is not relevant to the circumstances in this instance as the applicant was not dismissed for any reason related to his capacity, conduct, or unsatisfactory performance but instead, his dismissal was for reason of redundancy.
[42] This factor is not relevant to the circumstances in this instance as the applicant was not dismissed for unsatisfactory performance but instead, his dismissal was for reason of redundancy.
[43] The employer is a medium size business operation and therefore it was quite surprising to observe the severely flawed procedure that it adopted in respect to the implementation of the dismissal of the applicant. In particular, it was very surprising that the employer would contemplate conveying a letter of dismissal by email, without any prior personal communication, and providing only one days’ notice of termination.
[44] There was no evidence that the employer had management specialists and other staff with employment related expertise. However, the employer appeared to have little hesitation in engaging and obtaining advice from external lawyers. Consequently, it was very disappointing that the employer adopted a seriously flawed procedural approach that did not involve any reasonable level of personal communication prior to the provision of the formal advice of dismissal.
[45] In this instance the applicant was dismissed for reason of redundancy. There was evidence to support the financial circumstances that created the redundancy of inter alia, the applicant. However, there was no evidence that the employer engaged in a consultation process with the “full-time” and part-time language educators which explored a variety of potential measures that may have mitigated or avoided any termination for reason of redundancy. For example, there was no evidence that the language educators were invited to consider and/or offer suggested measures which might have avoided termination of employment.
[46] The employer identified the potential for subsequent re-employment in the event that funding might be provided so as to enable reduced hours arrangements for language educators. In these circumstances, it is conceivable that individual language educators may have been prepared to take a period of unpaid leave rather than have their employment terminated. Alternatively a number of the language educators may have been prepared to agree to reduced hours or job share arrangements rather than have their employment terminated. There was no evidence of any contemplation by the employer of other potential measures that may have mitigated the impact of any redundancy.
[47] The applicant was dismissed because the employer determined that it no longer had the financial capacity to continue his employment. The applicant was dismissed for reason of redundancy. The absence of any proper consultation or any contemplation of redeployment opportunities or other measures to mitigate or avoid redundancy, has meant that the dismissal of the applicant was not a case of genuine redundancy as would be contemplated by s. 389 of the Act.
[48] The procedure that the employer adopted whereby it provided the notification of dismissal by email, without any prior personal communication, and which advised that the employment would end with one days’ notice, was unnecessarily callous and unreasonable. Further, the employer failed to pay entitlements that were stipulated by both the NES and the applicant’s employment contract. Despite acknowledging that these entitlements were due to the applicant, the employer has not made payment, but instead attempted to use any payment of the due entitlements as the only financial consideration offered for settlement of the applicant’s unfair dismissal claim. Regrettably, the employer has also erroneously failed to recognise that the applicant was dismissed for reason of redundancy so as to avoid payment of any further entitlements provided by the NES.
[49] In summary, the dismissal of the applicant was not for any valid reason related to his capacity or conduct. The applicant was dismissed for reason of redundancy which did not satisfy the notion of genuine redundancy as contemplated by s. 389 of the Act. The dismissal of the applicant involved significant procedural defects, and it included contraventions of both s. 117 and s. 119 of the Act. The employer’s determination and implementation of the dismissal of the applicant was, on any reasonable and objective contemplation, harsh, unjust, and unreasonable. The applicant’s dismissal has been found to have been unfair and the Commission must logically consider the appropriate remedy that should be provided in this instance.
[50] The applicant advised that he was pursuing compensation as remedy for his unfair dismissal. The applicant made no suggestion as to the amount of compensation to which he believed he was entitled.
[51] In the circumstances, particularly as the employment of the applicant was significantly damaged by the very regrettable circumstances surrounding his dismissal, reinstatement would not be an appropriate remedy. In any event, the applicant has obtained alternative employment which he seeks to continue. In these circumstances, the appropriate remedy would logically involve an amount of monetary compensation.
[52] The Commission has determined that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and consideration must therefore be made of the factors which involve the quantification of any amount of compensation.
[53] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. The question of compensation has been approached having regard for the guidelines that have been established in the Full Bench Decisions of, inter alia; Sprigg v Paul’s Licensed Festival Supermarket 4 (Sprigg); Smith and Ors v Moore Paragon Australia Ltd 5 and more recently, the cases of; McCulloch v Calvary Health Care Adelaide6; Balaclava Pastoral Co Pty Ltd v Nurcombe;7 and Hanson Construction Materials v Pericich8 (Pericich).
[54] Firstly, the Commission confirms that an Order for payment of compensation to the applicant will be made against the respondent employer in lieu of reinstatement of the applicant.
[55] Secondly, in determining the amount of compensation that will be Ordered, the Commission has taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[56] There was no evidence provided which established that an Order of compensation would impact on the viability of the employer’s enterprise.
[57] The applicant had been employed for a period of about one year and eleven months. The applicant would have been likely to have received remuneration of approximately $1,400.00 per week if he had not been dismissed.
[58] There was evidence upon which to conclude that the employment of the applicant may have finalised in accordance with a proper process that involved consultation with inter alia, the applicant, and which carefully considered any measures that may have provided mitigation or even avoidance of termination of employment on account of redundancy. Consequently, a reasonable assessment that included allowance for delays that would have been associated with the school holiday period, has led to a conclusion that, if a proper consultation process had been adopted, then the employment of the applicant would have been likely to have concluded within six weeks after his unfair dismissal.
[59] For the purposes of calculation of remuneration that the applicant would have received or would have been likely to receive if he had not been dismissed, I have considered that the employment of the applicant would have continued for a further six weeks. Therefore, the total remuneration that would have been received in the notional period of six weeks following dismissal amounted to a figure of $8,400.00.
[60] The total amount of remuneration received in alternative employment, as identified, and that which may be reasonably likely to be earned between dismissal and the making of the Order for compensation, has been calculated to represent $0. There was evidence that the applicant had successfully obtained alternative employment after a period of six weeks without any remuneration following his unfair dismissal.
[61] Thirdly, in this instance there was no established misconduct of the applicant that should result in a reduction in the amount of compensation to be provided.
[62] Fourthly, the amount 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 the dismissal.
[63] Fifthly, the amount Ordered does not exceed the compensation cap as prescribed by s. 392 (5) of the Act.
[64] Consequently, for the reasons outlined above, taking into account all of the circumstances of the case, and having cognisance so as not to apply the approach taken in the Decision in Sprigg in a rigid, determinative manner, as was cautioned in the Decision in Pericich, the Commission has decided that the amount of compensation to be provided to the applicant should be a gross figure of $8,400.00.
[65] Accordingly, separate Orders [PR745135] providing for unfair dismissal remedy in these terms will be issued.
COMMISSIONER
Appearances:
Mr S Riley appeared unrepresented.
Mr N Foran of Counsel appeared for the employer.
Hearing details:
2022.
Mudgee.
June, 28.
Printed by authority of the Commonwealth Government Printer
<PR745134>
1 Exhibit 3 - Attachment “B”.
2 Exhibit 3 - Attachment “C”.
3 Exhibit 3 - Attachment “B”.
4 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.
5 Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.
6 John McCulloch v Calvary Health Care Adelaide, (Ross P, Hatcher VP and Gostencnik DP), [2015] FWCFB 873.
7 Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, (Hatcher VP, Gostencnik DP and Cribb C) [2017] FWCFB 429.
8 Hanson Construction Materials Pty Ltd v Darren Pericich, (Ross P, Masson DP and Lee C), [2018] FWCFB 5960.