[2013] FWC 97

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FAIR WORK COMMISSION

DECISION

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

Mr Willem Meischke
v
Green Engineering Pty Ltd
(U2012/12095)

SENIOR DEPUTY PRESIDENT HAMBERGER

SYDNEY, 22 JANUARY 2013

Application for unfair dismissal remedy.

[1] Mr Willem Meischke (Mr Meischke; the Applicant) made an application on 6 August 2012 seeking an unfair dismissal remedy under s. 394 of the Fair Work Act 2009 (the Act) in relation to the termination of his employment by Green Engineering Pty Ltd (the Respondent) on 2 August 2012.

[2] Mr Meischke’s application was not resolved by conciliation and was referred for arbitration. A hearing was conducted in Brisbane on 20 December 2012. The Applicant represented himself whilst the Respondent was represented by Mr Paul Thistleton, the Sales Manager for Green Engineering Pty Ltd.

[3] The Applicant gave evidence on his own behalf and Mr Thistleton gave evidence on behalf of the Respondent. No other witnesses were called.

Facts

[4] Mr Meischke was originally employed by the Respondent on 3 January 2012 as a Regional Sales Manager for the Sunshine Coast area.

[5] On 6 July 2013 Mr Meischke received an email from the Respondent advising him that his position of Regional Sales Manager was no longer necessary, instead offering him a position as a Sales Consultant. The email included: 1

‘We are writing to you to notify you that our Management is cancelling your employment contract as a regional sales manager for the Sunshine Coast due to the cancellation of the feed-in-tariff. Please return our rental company car to us early next week. Your last pay for this role will be next Thursday.

We are still willing to offer you a position which is a sales consultant position which copy of contract you have already got. Kindly return that contract duly signed so that we can continue paying you. However, if you cannot meet 25 KW a week, you will be terminated...’

[6] Mr Meischke accepted the new position as Sales Consultant. The terms and conditions of the Applicant’s new role were outlined in an email dated 27 June 2012, concerning the offer of appointment as sales consultant. Under clause 5 Remuneration, the offer stated: 2

‘Gross base annual salary is $60 000, plus 9 percentage of superannuation as discussed. Your salary payment will be weekly.

When total weekly sales reach 25Kw, you are entitled to have bonus of AUD$100 for every additional 10Kw sold. Bonus is paid to your ABN.

The company has provided you a company phone and will reimburse you with Petrol as per log book and authorized Business Related Expenses. However, you need to provide logbook, receipts and invoices...’

[7] During his employment Mr Meischke did not receive any communication concerning issues with his performance. 3 In regards to key performance indicators, the offer of employment stated in clause 4:4

‘Your Key Performance Indicator is 25Kw capacity per week. The Company will review your sales performance weekly. If you can’t reach the KPI of 25kw per week continually for more than 3 weeks, the Company reserves the right to terminate the employment immediately...’

[8] Mr Meischke was questioned during evidence in chief as to whether or not he had agreed to the KPI target set out in the offer of employment. The Applicant outlined his understanding in the following way: 5

‘You agreed to that?---I discussed this with - well, I was on annual leave at that time. I discussed this with Judy on my return and I was told by the company not to worry about the kilowatt hours. "Bill, you're part of the family. Don't worry about it." So on, I believe, 6 July, I signed that contract as a sales consultant. I failed to receive any leads, and the leads that I did receive were already contract-signed for those installations. Then on 2 August, I received an SMS message at 5.37 pm to go and check my emails, and there was an email there terminating my employment.’

[9] The evidence suggested that Mr Meischke had been led to believe that his employment was safe regardless of the KPI target set out in the offer of employment.

[10] On 2 August 2012 Mr Meischke received an SMS requesting that he check his emails. The email included the following: 6

‘We advise regrettably your position is no longer required by our company. We are under pressure to scale back the number of sales consultants in Sunshine Coast.

Please note your last working day with us is today, 02 August 2012. You will be paid until Thursday 2 August 2012. There are no leave entitlements as you have not passed the probation period...’

[11] As a result of receiving this email, Mr Meischke was terminated from his employment with the Respondent on 2 August 2012.

Consideration

[12] Section 396 of the Act provides that the following matters must be considered 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.’

[13] The application was made within the 14 day period specified in subsection 394(2).

[14] I am satisfied that the Applicant was a person protected from unfair dismissal at the time of the termination of his employment. Based on Mr Thistelton’s evidence, the Respondent had around 17 to 20 employees at the time of the Applicant’s dismissal 7, and was not therefore a small business employer, within the meaning of the Act. As a consequence he was required to have completed a minimum of six months continuous service with the Respondent at the time of his dismissal. Mr Thistleton conceded this was the case8. It is not clear whether the Applicant was covered by an award; however he clearly earned below the high income threshold.

[15] There is no doubt that the Applicant was dismissed. Based on the Respondent’s own evidence referred to earlier concerning how many people it employed at the time of the Applicant’s dismissal, the Small Business Fair Dismissal Code has no application.

[16] An issue does arise as to whether the Applicant’s dismissal was a case of genuine redundancy. Section 389 of the Act states:

‘(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.’

[17] The letter of termination received by the Applicant cited ‘pressure to scale back the number of sales consultants in Sunshine Coast...’ as the reason for terminating the Applicant’s employment. 9

[18] Under s385 of the Act a person cannot be unfairly dismissed where there is a case of genuine redundancy. 10 The termination letter of 2 August 2012 suggests that the Applicant’s dismissal may have been based on changes in the operational requirements of the Respondent. However, it was indicated that the Respondent continued to have Sales Consultants working in the Sunshine Coast area on the date of the FWC hearing.11

[19] Moreover during the hearing Mr Thistleton gave the following evidence as to why the Applicant was dismissed:

‘So do you know why it happened?---From asking the people internally, it was the KPIs, of not getting the 25 kilowatts a week.

So it was effectively, in that sense, a performance issue; not meeting a performance of target?---Theoretically, and, on paper, that's how it was.

Are there any other factual matters that - - -?---I believe what Bill said about, "Just do your best and we'll see how it goes", was said as well. I think, on paper, it was, "You need to do this", but I think, hearing what he said earlier about, "You'll be right, mate. Just keep going", may have been said as well. So that's the only other thing I can add.’ 12

[20] From this it is clear that the real reason for the termination of the Applicant’s employment was related to his performance as an employee. It was not a case of genuine redundancy.

[21] The issue before me accordingly is whether the applicant’s dismissal by the Respondent was harsh, unjust or unreasonable. Section 387 of the Act spells out the criteria for consideration in deciding this issue. These are:

‘(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 FWA considers relevant.’

[22] There was very little evidence before me about whether there was a valid reason for the Applicant’s dismissal, based on his capacity or conduct. He does not appear to have met his KPI but it is hard to assess whether the KPI was in any sense reasonable, or whether he was given a reasonable opportunity to achieve it. On balance, the fact that he was terminated only three weeks into the role as Sales Consultant would suggest that there was no valid reason for his dismissal.

[23] Certainly the Applicant was not notified of the real reason for his dismissal by the Respondent or given an opportunity to respond before the decision to terminate his employment was made. The evidence given by Mr Meischke included: 13

‘So there was no discussion about your performance or anything like that?---No, nothing throughout both roles.’

[24] The evidence demonstrates that during his employment Mr Meischke was not warned by the Respondent about his unsatisfactory performance prior to his dismissal. 14 Subsequently, Mr Meischke was not aware that his employment was in jeopardy due to his performance.15

[25] In considering all of the evidence, it is determined that the Applicant’s termination of employment by the Respondent was harsh, unjust or unreasonable.. 16¹⁷

[26] I am satisfied that Mr Meischke was protected by unfair dismissal and has been unfairly dismissed. I consider that reinstatement is inappropriate. It was indicated that the relationship between Mr Meischke and senior employees of the Respondent is irreparably damaged. In the circumstances, I consider an order for compensation in lieu of reinstatement is appropriate.

[27] Section 392 of the Act sets out the criteria for deciding the appropriate amount of compensation. In particular, s.392(2) says:

‘(2) In determining an amount for the purposes of an order under subsection (1), FWA 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 FWA considers relevant.’

[28] In determining the amount of compensation to be awarded, I have given consideration to the Australian Industrial Relations Commission Full Bench decision of T. Sprigg v Paul’s Licensed Festival Supermarket. 18

[29] While there has been evidence as to the volatile nature of the industry the Respondent operates in, 19 there is no evidence to suggest that the respondent is suffering from financial difficulties. Therefore, it is not considered that any order made in this case would adversely affect the Respondent’s viability.

[30] The Applicant was employed be the Respondent from 3 January 2012 until his notice of dismissal on 2 August 2012. This was a period of approximately 7 months. It could be surmised that, but for the termination, Mr Meischke would have been employed for a reasonable period of time as there had been no previous indication that he had been producing poor work. On the evidence provided, it was apparent that there had positive working relationship in place between the Applicant and Respondent. 20 It would be reasonable to suppose that if the termination had not occurred, the Applicant would have been employed for a further period of 4 months.

[31] At the time the Applicant was dismissed he was in receipt of a salary of $60 000, with the Respondent contributing 9% for superannuation. There was no evidence of an alternative earnings sustained by the Applicant and nothing was provided to indicate that the Applicant was receiving any continuing workplace payments.

[32] There was some evidence from the Applicant concerning his efforts to mitigate his loss: 21

‘MR MEISCHKE: ... I actually applied for a job at the Mark Group, which is a very large solar company from the UK that was invited here by the Australian Government, and I just missed out on that position as state manager, but I've probably applied for about 300 jobs. Monday night, I applied for another 12 jobs, but currently, for the last four and a half months, I have not been employed at all.’

[33] It is considered that Mr Meischke has undertaken considerable efforts to find further employment and mitigate the loss he has sustained. There was no conflicting evidence provided by the Respondent.

[34] During the hearing it also became apparent that the Applicant had not received any notice or payment in lieu of any notice. This is not compliant with the National Employment Standards which states that anyone employed for less than a year is entitled to one week notice.’ 22

[35] Based on the previous consideration, Mr Meischke suffered a loss of remuneration of $20,000 plus 9% superannuation.

[36] I have decided to apply a discount of $5,000 to reflect the Applicant’s relatively short period of service with the employer.

[37] The effect of taxation has been considered, however a gross amount has been settled on and taxation is left for the parties to deal with.

Conclusion

[38] The Applicant was unfairly dismissed by the Respondent. The Applicant will receive compensation to the amount of $15,000 plus $1350 superannuation. An order to this effect accompanies this decision.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr Willem Meischke, the applicant

Mr Paul Thistleton, for the respondent

Hearing details:

Brisbane

2012

20 December

 1   Exhibit T1 - Letter from Ms Singh and Mr Yi to Mr Meischke dated 06/07/2012.

 2   Exhibit T2 - Offer of Appointment as sales Consultant.

 3   See paragraph 54 of the transcript dated 20 December 2012.

 4   Exhibit T2 - Offer of Appointment as sales Consultant.

 5   See paragraph 36 of the transcript dated 20 December 2012.

 6   Exhibit M3. letter of termination dated 2 August 2012.

 7   PN84

 8   PN85

 9   Exhibit M3 - letter of termination dated 2 August 2012.

 10   Fair Work Act 2009 (Cth) s385(d).

 11   See paragraph 88 of the transcript dated 20 December 2012.

 12   See paragraphs 90-92 of the transcript dated 20 December 2012

 13   See paragraph 54 of the transcript dated 20 December 2012

 14   Fair Work Act (2009) Cth s387(e).

 15   See: National Jet Systems Pty Ltd v Mollinger Print R3130.

 16  

17 Fair Work Act (2009) Cth s387.

 18   Print R0235.

 19   See paragraph 88 of the transcript dated 20 December 2012

 20   See paragraph 59 of the transcript dated 20 December 2012

 21   See paragraph 123 of the transcript dated 20 December 2012

 22   Fair Work Act (2009) Cth s117.

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