[2011] FWAFB 9137

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Fair Work Act 2009
s.604—Appeal of decisions

Jenny Craig Weight Loss Centres Pty Ltd
I Margolina



[1] On 21 March 2011 Jenny Craig Weight Loss Centres Pty Ltd (the appellant) terminated the employment of Ms I. Margolina (the respondent) by a letter of the same date. 1 Ms Margolina was paid redundancy pay and other entitlements.

[2] On 31 March 2011 the respondent lodged an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. On 9 May 2011 the application was the subject of conciliation. Conciliation was unsuccessful. On 4 May 2011 the appellant mounted a jurisdictional challenge to the application. The jurisdictional challenge was heard by Commissioner Ryan, who dismissed it on 8 August 2011. 2 This appeal was lodged on 29 August 2011 and heard on 15 November 2011. We deal with the grounds of appeal below. They raise two principal questions: whether the respondent was a person protected from unfair dismissal and, if so, whether the application must nevertheless fail because the dismissal was a genuine redundancy.

[3] The appeal is brought under s. 604 of the Act. Section 394 is found in Part 3-2 of the Act. There are special provisions in s.400 relating to appeals from decisions under that part. Section 400 reads:

[4] In summary: an appeal only lies with permission, permission is not to be granted unless the Full Bench considers that it is in the public interest to do so and an appeal can only be made, to the extent that it is an appeal on a question of fact, on the ground that the decision involved a significant error of fact.

Was the respondent protected against unfair dismissal?

[5] We deal first with the question of whether the respondent is a person protected from unfair dismissal. Section 382 prescribes the types of persons who are protected from unfair dismissal. It is unnecessary to set the whole of the section out. Where relevant it reads:

[6] It can be seen that pursuant to s.382((b) if an employee is not covered by a modern award and an enterprise agreement does not apply to them at the time of dismissal, an income test is applied to determine whether they are protected from unfair dismissal. The income test is the high income threshold. At 1 July 2011 the high income threshold was $118,100. In this case, Commissioner Ryan found that the respondent was covered by the Clerks – Private Sector Award 2010 (Clerks Award). 3 It was therefore unnecessary for him to consider whether the respondent was earning less than the high income threshold.

[7] The appellant submitted that the Commissioner erred in finding that the respondent was covered by the Clerks Award. At the time of the dismissal the respondent was engaged by the appellant as a regional manager, sometimes referred to as a regional leader. Her job description included the following:

[8] The respondent reported to the Field Operations Manager. Her duties included leading and developing teams, directing the region’s Jenny Craig centres and oversight of the Regional Trainer and of centre leaders. The appellant’s Human Resources Manager, Ms Senior, gave evidence about the regional manager role. She indicated that regional managers look after twelve centre leaders, and described their position as a ‘leadership role’. The salary of a centre leader is about $38,000 a year. We deal with the respondent’s income in more detail below, but a regional manager receives a base salary of $60,000 to $65,000 but can earn about $120,000 a year when bonuses and other payments are included. A regional manager manages 40 to 50 staff.

[9] The respondent had the power to hire and fire staff. She interviewed, recruited and inducted employees and was responsible for scheduling their work. She was also responsible for providing feedback to employees to correct and improve their performance and for ensuring employees had the necessary skills. She had full responsibility for achieving the quotas set for her region. She liaised with other companies. She had an overseeing role rather than direct contact with clients.

[10] Clause 4.1 of the Clerks Award says who it covers. It reads:

[11] Clerical work is defined in Clause 3 of the award as follows:

[12] We are unable to conclude that the respondent was engaged “wholly or principally in clerical work” as that term is defined in the Clerks Award. The duties of a regional manager have some elements of clerical work but they are mainly supervisory or managerial. The Commissioner was in error to find otherwise.

[13] The Commissioner found that no other award or enterprise agreement applied to the respondent’s employment. We agree. It follows that the respondent is not protected against unfair dismissal unless she was earning less than the high income threshold provided for in s.382(b)(iii). We deal with that matter now.

[14] The evidence before the Commissioner was that for the financial year ended 30 June 2010, the respondent received $202,000. This was comprised of $60,000 base salary, a five year bonus of $100,000, and a bonus of $42,000 for performance in the financial year. The five year bonus was a one-off payment made after 5 continuous years of service as a regional manager.

[15] The five year bonus is dealt with in documents setting out the appellant’s remuneration structure. The Jenny Craig Remuneration Structure 5 as at 1 January 2006 provides that:

[16] The revenue growth expectations are set out and the policy then provides that ‘Management has the right to modify the Expectation at its discretion.’ There are similar terms in the Jenny Craig Remuneration Structure of 1 January 2007.

[17] Both salary structure documents contain a general reservation that management may modify or discontinue the remuneration plan at its discretion.

[18] As noted above, the high income threshold at the relevant time was $118,100. It is clear that the base salary is to be taken into account in ascertaining whether the respondent was earning less than the threshold, but a question arises in relation to the bonus payments. Section 332 of the Act defines employee earnings and excludes certain things. Where relevant it reads:

[19] It seems clear enough that the legislature intended to exclude bonus payments which are contingent, either because they depend on performance in some way or because management reserves the right to modify or discontinue them. On the evidence in this case it seems that both the annual bonus and the one-off five year bonus are contingent in the relevant sense. In relation to the five year bonus, there is a specific reservation of the right to alter or discontinue the plan. It is unclear, although it is likely that the same reservation applies in relation to annual performance bonuses. This cannot be determined in advance because the remuneration policy provides that: “Management has the right to modify and discontinue the remuneration plan at its discretion”. 6

[20] For the purposes of the high income threshold, the respondent’s income was no more than $102,000. This is less than the high income threshold. The respondent is therefore protected from unfair dismissal within the meaning of s.382. This answers the first question arising in the appeal.

Was the respondent’s dismissal a case of genuine redundancy?

[21] Section 385(d) of the Act sets out the requirements for a dismissal to be unfair. One of those requirements is a negative one, namely: that the dismissal was not a case of genuine redundancy. The meaning of genuine redundancy is dealt with in s.389:

[22] It appears to be common ground that the terms of s.389(1) of the Act were fulfilled in this case. There is an issue, however, in relation to s.389(2). The appellant contended, before the Commissioner and on the appeal, that because of the operation of s.389(2), the termination of the respondent’s employment was not a case of genuine redundancy. In other words, it would not have been reasonable to redeploy her. The Commissioner rejected the submission. 7

[23] The evidence indicates that no other position was offered to the respondent and that the possibility of redeployment was never discussed. While there were no regional manager positions available, there were vacancies for centre leaders and possibly other vacancies. A regional manager is responsible for 10 to 12 centres, while a centre leader is in charge of just one centre. Centre leaders are paid $38,000 a year and they supervise 10 to 15 other employees.

[24] The following passage is taken from the evidence given by Ms Senior to the Commissioner:

[25] The respondent gave evidence that she would not have insisted on a role commensurate with her previous job and salary. She was cross-examined about whether she would have accepted a position as a centre leader. The following exchange is relevant:

[26] In other evidence the respondent agreed that she had never made a written request for more flexibility in her working hours. She said she would have happily driven from her home in East Malvern to Frankston or to Moonee Ponds every day for such a centre leader role. She also claimed that there were other positions that she would have taken, for example Jenny Craig At Home, which she said is two minutes away from her home.

[27] In Ulan Coal Mines Limited v. Honeysett and others 10 a Full Bench of the tribunal considered s.389(2) and said:

[28] In this case it is clear that there was a centre leader position available. The respondent had the necessary skills, qualifications and experience and she had no objection based on location. While the income was much lower and the responsibility much less than for a regional manager, she gave evidence that she would have accepted a centre leader role for reasons which we have referred to above. There is no reason to disbelieve the respondent’s evidence, even though she has now taken a leadership role, which appears to be similar to her former role with the appellant.

[29] We agree with the Commissioner’s conclusion that it would have been reasonable in all the circumstances for the respondent to have been redeployed. It follows that the dismissal was not a case of genuine redundancy.


[30] We are satisfied that it is in the public interest to permit an appeal. While the Commissioner was in error to find that the respondent was covered by an award, the respondent was still protected from unfair dismissal because she was earning less than the high income threshold. We have rejected the ground of appeal based on s.389(2) of the Act. In the circumstances the appeal must be dismissed and the Commissioner’s decision confirmed.



N Ritchie for Jenny Craig Weight Loss Centres Pty Ltd.

C Illinov for I Margolina.

Hearing details:



November, 15.

 1   Attachment SS1 to Exhibit I10, witness statement of Ms Senior.

 2   [2011] FWA 5215.

 3   MA000002.

 4   Exhibit A1.

 5   Statutory Declaration of Ms Margolina, Appeal book pp.74-75, pp.93-96.

 6   Statutory Declaration of Ms Margolina, Appeal book p.75.

 7   [2011] FWA 5215 paragraphs 19-43.

 8   Evidence of Ms Senior PN105-106.

 9   Evidence of Ms Margolina PN339-341.

 10   [2010] FWAFB 7578.

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