[2014] FWC 2356

[2014] FWC 2356

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mark Robson
v
Chromagen Management Services
(U2013/14705)

DEPUTY PRESIDENT SMITH

MELBOURNE, 9 APRIL 2014

Application for relief from unfair dismissal - jurisdictional objection - genuine redundancy.

Introduction

[1] Mr Mark Robson argues that he was dismissed unfairly by Chromagen Pty Ltd. (Chromagen). Mr Robson began his employment on 6 February 2012 and was made redundant on 21 October 2013. Mr Robson worked his notice and his last day of work was 4 November 2013. The primary argument advanced by Mr Robson was that he should have been redeployed within the business.

[2] To begin, I conferred with the parties in accordance with section 399 of the Fair Work Act 2009 (the Act). Attempts were made to resolve the matter in the informal environment however it was necessary to proceed by way of hearing.

The Jurisdictional Legislative Framework.

[3] Chromagen argued that this was a genuine redundancy and therefore not within the jurisdiction of the Commission. Both Mr Robson and Chromagen rely upon the meaning of genuine redundancy to advance their arguments. Section 385 of the Act defines an unfair dismissal and it does include a dismissal which is a genuine redundancy. Section 389 defines genuine redundancy and provides:

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.

[4] During the conference, Chromagen agreed that it was bound by a modern award and in the hearing it was clear that it had not consulted in accordance with s.389. The evidence of the Chief Executive Officer of Chromagen, Mr J Hooper, was that he consulted his management team but not any other employees or Mr Robson. I find that the termination of employment of Mr Robson was not a genuine redundancy in accordance with the Act. I find that Mr Robson is a person protected from unfair dismissal.

[5] I also note in passing that given the number of employees, the Small Business Fair Dismissal Code does not apply.

The Facts.

[6] The facts in this case are relatively straight forward.

[7] It is accepted by Mr Robson that business conditions were such that a decision on redundancy was not unreasonable. However, he argued that he should have been redeployed to a position which was being advertised during his notice period. The position was advertised at a salary which was $20,000pa less than Mr Robson was receiving and at a much lower status within the organisation. However, it was the evidence of Mr Hooper that this position was withdrawn two days before Mr Robson’s end date. Further, it has not been re-advertised and will not form part of the employment structure of the company.

[8] There is no issue that Mr Robson was a valuable employee. Indeed Mr Hooper wrote a glowing reference of his abilities.

[9] Following his termination of employment, Mr Robson secured another job on 7 November 2013, some three days later. However, his starting salary was his starting salary at Chromagen namely $50,000. This was $20,000 less than he was earning at the time of his dismissal.

[10] During the evidence of both Mr Robson and Mr Hooper it was clear that there was a good relationship and that both men respected each other.

Criteria for Considering Harshness.

[11] Section 387 provides:

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.

[12] Section 387 (a) applies to the extent that the dismissal related to relative capacity. That is, the view held by Chromagen that with the changes in the market, the breadth of skills held by other employees were to be preferred over Mr Robson’s skills (which are known and respected). Some explanation is necessary. Chromagen’s primary business is the sale of hot water systems to the residential construction market. It also sells solar energy systems. Mr Robson was the only employee who specialized in the solar energy side of the business and it was considered that with significantly reduced sales in this area, it was preferable to retain generalist representatives. Mr Robson considered that, with training, he could be valuable in all areas of the business.

[13] Mr Robson was notified of the reason for his termination (s.387 (b)). I am satisfied that he was given an opportunity to respond to the decision given that he worked out his notice and the parties conducted themselves in a cordial and friendly manner. The written reference provided to Mr Robson confirms the high regard in which he was held.

[14] Sections 387 (d), (e), (f) and (g) do not have relevance. The company does have human resources advice and except for one matter to which I shall later turn, appropriate matters were taken into account. The appropriate notice and redundancy payments were made.

[15] As to s.387 (h), I will take into account the argument by Mr Robson in relation to redeployment within the company.

Conclusion

[16] The main concern of Mr Robson is that he was not redeployed into the lower paid position. Chromagen considered that Mr Robson would not accept the position and therefore did not raise it with him. This was a mistake. Mr Robson’s evidence was that given his financial commitments at the time, he would have accepted the position. Chromagen was not acting with any malice, but genuinely thought that Mr Robson deserved better. Making such assumptions in a redundancy situation is not advisable. I also don’t accept that Mr Robson should have raised the matter. Two factors speak against that proposition. Firstly, Mr Robson said that he was not aware that the position was being advertised and secondly, such facts are mostly within the knowledge of the employer. It is for the employer to explore possibilities for redeployment and not transfer the onus onto the employee. The employer is making the decision in relation to redundancy and should take active measures to overcome the loss of employment through no fault of the employee.

[17] Given the change in the business environment, I find that Chromagen had a valid reason for the termination of Mr Robson’s employment. However, was it otherwise harsh, unjust or unreasonable?

[18] The failure to ask Mr Robson about alternatives to redundancy and to give him a level of knowledge sufficient to make a decision was an error in the process. If the alternative position at the lower pay had been filled in circumstances where Mr Robson was not provided with the opportunity to consider his position, then this may have resulted in a different outcome. However, the job never materialised. Therefore I find that the termination of Mr Robson as a result of a declaration of redundancy was not hash, unjust or unreasonable.

[19] Mr Robson was fortunate to find another position a couple of days later albeit at a lower rate. As it turned out, the rate of pay for his new position, was the rate that he said that he should have been offered, so if the matter moved to a consideration of compensation then there was no loss.

[20] There should be no winner or loser in this matter. Both Mr Robson and Mr Hooper acted in a genuine way and indeed the relationship remained good at the conclusion of the hearing. In terms of my obligations under the Act, I dismiss the application.

DEPUTY PRESIDENT

Hearing details:

2014.

Melbourne.

April 7.

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