[2014] FWC 4565

FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Mr Rhett Collie
v
Metropolitan Caloundra Surf Life Saving Club Inc
(U2013/14262)

DEPUTY PRESIDENT ASBURY

BRISBANE, 9 JULY 2014

Application for relief from unfair dismissal - Jurisdiction - Genuine redundancy.

Background

[1] Mr Rhett Collie applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to his dismissal by Metropolitan Caloundra Surf Lifesaving Club Inc. (the Club). The application is met with a jurisdictional objection on the ground that the dismissal was a case of genuine redundancy, and accordingly, Mr Collie’s dismissal was not unfair.

[2] Both parties referred to the Small Business Fair Dismissal Code and made submissions about whether the dismissal was consistent with its terms. Those submissions are misconceived. As Vice President Watson pointed out in Iannello v Motor Solutions Australia Pty Ltd 1 the Small Business Fair Dismissal Code does not deal with redundancy. Here, there is no issue with Mr Collie’s conduct, capacity or work performance, and the reason given for his dismissal was redundancy. Accordingly, to establish that the dismissal was not an unfair dismissal, the Club must establish that the dismissal was a genuine redundancy as defined in s.389 of the Act. That section provides as follows:

[3] The parties are also in dispute about whether the Club is a small business employer. This dispute arises because the Club did not make redundancy payments to Mr Collie on the basis that it asserts that it had less than 15 employees at the time of the dismissal. The Club also asserts that there were no alternative positions to which Mr Collie could have been redeployed and that there was no associated entity for the purposes of redeployment.

[4] Mr Collie asserts that there is an associated entity, namely the Metropolitan Caloundra Surf Life Saving Supporters Club Inc. (the Supporters Club) and that the Club and the Supporters Club have more than 15 employees so that he is entitled to redundancy pay. Mr Collie further asserts that it would have been reasonable to redeploy him to an alternative position within the Club or the Supporters Club.

[5] Notwithstanding the focus the parties placed on the question of Mr Collie’s entitlement to a redundancy payment, the present matter does not concern the question of Mr Collie’s entitlement to that payment. The relevance of whether the Club and the Supporters Club are associated entities arises because it is necessary to consider whether it would have been reasonable to redeploy Mr Collie to the Supporters Club. The issues for determination are:

Was Mr Collie’s job no longer required to be performed by anyone?

[6] Mr Collie was employed by the Club as Head Coach on a full time basis. Mr Collie commenced employment on 5 July 2004. A new employment agreement was entered into between Mr Collie and the Club on 20 June 2013, and that agreement operated until Mr Collie’s dismissal on 28 August 2013. Mr Richards, the Club’s Director of Planning and Administration gave evidence to the effect that a new Management Committee for the Club was elected at an annual general meeting held on 13 July 2013. The President’s Report in the 2012-2013 Annual Report states:

[7] The audited financial report for the Club for the year ending 30 April 2013 was tabled at the 13 July 2013 meeting, and contained a paragraph headed “Emphasis of Matter” in the following terms:

[8] According to Mr Richards, the Finance Committee met on 20 August 2013 and approved a budget for the 2013/2014 financial year which involved a reduction in expenses in all areas, including casual administrative staff and the full time Head Coach role filled by Mr Collie. It was resolved that the hours of administrative/accounting staff working on a casual basis would be reduced by 2/3 and that the permanent positing of full time coach was no longer required. It was also decided that Mr Collie would be offered a casual coaching role on an “as required” basis.” When Mr Collie declined this position, and the finances of the Club deteriorated further, it was decided that some of the duties of the proposed paid casual coaching role would be taken on by volunteers.

[9] Accordingly I am satisfied that Mr Collie’s job was no longer required to be performed by anyone because of changes in the operational requirements of the Club.

Did a modern award apply to Mr Collie’s employment?

[10] Mr Collie’s written contract of employment states that it operates within the governing laws of Queensland. Mr Collie submitted that while no award was referred to in his written contract of employment, that “the two awards that relate closest to my work history are the Sporting Organisations Award 2010 or the Registered and Licenced Clubs Award 2010”.

[11] The Sporting Organisations Award 2010 is an industry award with classifications covering coaches with coaching qualifications. Mr Collie’s evidence is that he holds the qualifications of a Diploma of Business (Hospitality) and a Bachelor of Science (Sport and Exercise).

[12] Mr Collie also gave evidence that he is a qualified patrol captain and has held elected and voluntary positions with Surf Lifesaving Clubs and Surf Lifesaving Queensland as Club Captain, Queensland State Team Coach and Queensland State Coaching Advisor.

[13] The Registered and Licensed Clubs Award 2010 covers employers of employees engaged in the performance of all or any work in or in connection with or for clubs registered or recognised under State, Territory or Commonwealth legislation and their employees. The Registered and Licensed Clubs Award contains classifications for food and beverage attendants, kitchen attendants, cooks, gaming attendants and liquor service employees. There is no evidence that Mr Collie performed any of the work described in the Registered and Licensed Clubs Award notwithstanding that he holds a Bachelor of Business (Hospitality).

[14] Mr Richards said in his evidence that he did not think that Mr Collie was covered by an Award during the time he was employed by the Club. When the casual position was offered to Mr Collie it was decided to “look at” the Sporting Organisations Award as a basis for that position.

[15] In circumstances where Mr Collie gives unchallenged evidence of his coaching qualifications and experience, and in light of the definitions in the Sporting Organisations Award 2010 I am of the view that the Sporting Organisations Award 2010 applied to Mr Collie’s employment. I am fortified in the view that this award applied to Mr Collie’s employment by the fact that when the Club offered him a casual position after informing him that his full time role was redundant, it was on the basis that he would be paid the rate under that Award.

Did the Club comply with Award obligations to consult about Mr Collie’s redundancy?

[16] Clause 8.1 of the Sporting Organisations Award 2010 provides in relation to consultation:

“Consultation regarding major workplace change
(a) Employer to notify

(b) Employer to discuss change

[17] The evidence about discussions in relation to the decision to make Mr Collie’s position redundant, can be summarised as follows. Mr Collie was employed under a series of contracts which were periodically renewed. Mr Collie gave evidence about a number of issues with renewal of his contract during the period of his employment which are not relevant to the issues in dispute in this matter.

[18] Mr Collie said that in 2012 he agreed on some changes to his contracted duties to financially assist the Club in retaining his position. In March 2013 Mr Collie was advised by the Director of Surf Sports Mr Morris, that the renewal of his position had been discussed and it had been decided that his contract should be extended for a further year. Mr Collie tendered minutes of a meeting of the Club’s Management Committee held on 21 March 2013 containing a resolution that he be employed as the Club Coach for the 2013-2014 season. 2

[19] Mr Collie signed a contract dated 20 June 2013 detailing that offer. The Club’s President Mr McDonald subsequently refused to sign the contract and later provided a version dated 23 June 2013 containing an amendment in the following terms:

[20] Mr Collie said that the intent of this amendment was to relieve the Club of the obligation to pay redundancy in the event that the contract was terminated early. Mr Collie refused to sign the amended contract and the original version was later signed by members of the Board of Management who supported Mr Collie. The signed contract covered the period from 1 July 2013 to 30 June 2014, with an option for an additional year. Mr Collie’s salary package under the contract was $84,104 per annum comprising:

[21] Mr Collie said in his evidence that the signing of this contract was rushed and that he did not receive a CPI increase as provided for in the contract.

[22] According to Mr Collie, at the June 2013 Annual General Meeting, a new Management Committee was elected and on 11 August 2013 a Finance Committee meeting was held. Mr Collie was informed by a person who attended that meeting that it would have repercussions for his position. Mr Collie tendered an email from the Club Secretary, Mr Simon Richards to the Director of Surf Sports, Mr Jeff Morris stating that the Board of Management would need to make a decision about the Finance Committee recommendation. The email also states that Mr Richards is happy to have an informal discussion with Mr Collie and other staff, but until the Board had signed off on the recommendation “we have to be careful what we discuss with Rhett (and other staff)”. The email concludes with Mr Richards indicating that Mr Collie will want to know what his “options are in relation to his role” and that he is awaiting legal advice regarding this.

[23] Mr Collie tendered a further email from Mr Morris to Mr Richards dated 25 August 2013, where he states that he had received questions about Mr Collie’s position from the parents of some Nippers and that the Club needed to meet with Mr Collie immediately to discuss his options. On 28 August 2013 Mr Collie met with Mr Richards, who told him that his contract would be terminated and an official letter would be sent to him. Mr Collie was further informed that he would be getting four weeks notice that he was requested to work during this time. Mr Collie was also informed that he would be paid his accrued annual leave and long service leave, but that the Club was not required to make redundancy payments because it is a small business.

[24] There was also a discussion about casual employment, during which Mr Richards told Mr Collie that an offer would be forthcoming but the Club had a budget and the work would have to fit within that budget, and that what had already been paid to Mr Collie since the start of the season would also have to fit within the budget. Mr Collie said that when he questioned Mr Richards about redundancy he was told that if the Club was made to pay redundancy, that amount would also be deducted from the available budget.

[25] Mr Collie received a letter by email on the evening of 28 August 2013 stating that:

[26] Mr Collie responded to that letter on 2 September 2013 pointing out that the offer of a casual position did not contain sufficient detail and disputing that the Club is a small business on the ground that the Supporters Club is an associated entity. In a letter of 11 September 2013 the Club informed Mr Collie that he would be engaged for an average of ten hours per week in the casual position and had until 13 September 2013 to indicate whether he accepted this offer. The letter also reiterated that the Club is a small business and rejected the proposition that the Supporters Club and the Club are associated entities.

[27] In CEPU v QR Limited 3 Justice Logan said in relation to the content of the obligation to consult, that:

[28] I do not accept that the Club consulted Mr Collie about his redundancy, in accordance with its obligations under the Award. At the point that the intention to make his position redundant was discussed with Mr Collie, it was a fait accompli and the only possible option open to Mr Collie was a casual coaching position with uncertain hours. While it was open to the Club to discuss this option with Mr Collie, the casual position was presented as the only option. The manner in which the discussions occurred does not fulfil the obligations under the Award to consult.

[29] There was no discussion with Mr Collie about relevant skills and whether he could perform work other than coaching. While I accept that the Club’s capacity to redeploy Mr Collie into an administrative role was limited, there were casual employees performing work which could have been used to supplement the casual coaching role. This option was not discussed with Mr Collie, and had a proper consultative process been followed this subject could and should have been discussed.

Would it have been reasonable for the Club to have redeployed Mr Collie within its own enterprise?

[30] The Club maintains that it would not have been reasonable to redeploy Mr Collie within its own enterprise on the basis that there were three other casual administration/accounting staff and their hours were also being reduced by 2/3 due to a reduction in operating funds.

[31] Under cross-examination, Mr Richards said that he had not considered removing some of the hours from casual employees and offering them to Mr Collie to offset the reduction in his hours. At the time of the decision to make Mr Collie’s position redundant, the casual staff were each working 15 hours per week. After the redundancy, those staff are now working an average of 5 hours per week. Mr Richards said that one of the casual employees has basic administrative skills and undertakes tasks including sending SMS messages to patrol members and entering patrol statistics in a membership program. Another employee who works five hours per fortnight does MYOB accounting and book-keeping and the third employee does general administrative tasks and banking.

[32] In response to a question from the Commission, Mr Richards said that he did not consider offering those administrative duties to Mr Collie because he did not think that Mr Collie was capable of undertaking them, and because the hours were being reduced, he did not think that it was practical to offer them to Mr Collie. Mr Richards said that he did not know what qualifications and experience were held by Mr Collie and agreed that two of the casual staff did not have any formal qualifications.

[33] Mr Collie said that he had previously been in negotiations with the former President in relation to taking on some of the hours performed by casual administrative staff to offset some of the cost related to his position, and that some provisions allowing for renegotiation of his contract in the event of changing responsibilities, were intended to reflect this.

[34] Given the failure of the Club to consult Mr Collie about mitigation in relation to the loss of his permanent position, and the lack of knowledge about his qualifications and experience which would have been discussed had proper consultation occurred, I am unable to accept that the Club has established that it would not have been reasonable to redeploy Mr Collie by allocating to him at least some of the work being performed by those casual employees, in addition to the casual coaching role.

Are the Club and the Supporters Club Associated Entities?

[35] By virtue of s.12 of the Act, “associated entity” has the meaning given by s.50AAA of the Corporations Act 2001 which is in the following terms:

“50AAA Associated entities

[36] Control is defined in s.50AA of the Corporations Act 2001 as:

the first entity is taken not to control the second entity.”

[37] The Constitution of the Club provides at Part A item 2 – Control, that Auxiliary Organisations may be formed and affiliated to the Club providing such organisations have similar aims and objects as the Club and are subject to overall control of the Club. By virtue of Part B item 9 Auxiliary Organisations shall subscribe to the Constitution, Rules etc. of the Club. Item 10 of Part B provides that the Council of the Club has primary functions of governing and providing leadership to the Club and its Auxiliary Organisations. 5 The By-Laws of the Club provide at 7.2 that the Club may authorise the formation and affiliation of auxiliary organisations and that by virtue of By-Law 7.9 the Club and its affiliates agree that they are bound by the Constitution and the By-Laws and that these:

[38] Mr Collie tendered the minutes of the 2012-13 Annual General Meeting of the Club where the Supporters Club was moved and accepted as an Auxiliary Organisation. 6

[39] Mr Collie also tendered the Constitution of the Supporters Club. That Constitution provides that the Supporters Club is established to conduct fundraising activities on behalf of the Club; to promote the aims and objects of the Club; and to render aid to the Club by financial or other means. By virtue of Item 10 of the Supporters Club constitution its management committee consists of a President, Deputy President, Secretary, Treasurer and three committee members. At least 5 members of the Management Committee must be ordinary members of the Supporters Club. Ordinary members of the Supporters Club must (by virtue of Item 4 of its Constitution) also be voting members of the Club. One of those 5 members must also be the President of the Club. The Supporters Club constitution provides at Item 15 that no business shall be transacted at any annual general meeting unless a quorum of ordinary members are present and every question, matter or resolution is required to be decided by a quorum of ordinary members.

[40] Mr Collie said that at the time of his dismissal, there were three members of the management committee of the Club who were also members of the management committee of the Supporters Club. The other three members of the management committee of the Supporters Club were either past presidents or life members of the Club.

[41] Mr Collie tendered the minutes of a Special General Meeting held on 28 April 2013 where approval was given for the Club to borrow an amount of $800,000 to refurbish the Supporters Club. Mr Richards said that it was his understanding that these minutes were minutes of a meeting of the Supporters Club and that the money was to be borrowed by the Supporters Club. Mr Richards said that the loan has not been proceeded with and is to be in the name of the Supporters Club. Mr Richards agreed that this is not what is reflected in the minutes and did not produce minutes of any subsequent meeting amending that resolution and approval.

[42] The Club operates out of two buildings. The first building is a council owned building on Ormand Parade, Caloundra which provides space for lifesaving and equipment storage. The second building sits on land located at 1 Spender Lane, Caloundra which is leased by the Club. The building is owned by the Club. It provides space for dormitories, offices for staff, kitchen facilities and was also where Mr Collie’s office was located.

[43] The Supporters Club operates out of the upstairs space at the Spender Lane property and leases that space from the Club. The Club relies on the income produced by the Supporters Club to assist in undertaking its primary objectives. The 2012-2013 Annual Report of the Club states that its Building Sub-Committee has developed plans for the renovation of the Supporters Club. That Report also refers to the fact that the Supporters Club is re-establishing its financial position and that excess funds may not be available from the Supporters Club while this occurs.

[44] After considering all of the evidence and submissions I have decided that the Club and the Supporters Club are associated entities as defined in s.50AAA of the Corporations Act 2001. In this regard, it is clear from the evidence, including the respective constitutions of the two entities, that the Club is the principal and that it controls the Supporters Club as an associate. The Supporters Club is an Auxiliary Organisation accepted as such in accordance with the rules of the Club. The legal and practical effect of this relationship is that by virtue of the Constitution of the Club, the Supporters Club can be an auxiliary organisation only on the basis that it subscribes to the constitution of the club, and is bound by that constitution and the by-laws.

[45] The Supporters Club is established to conduct activities in support of the Club. That is the reason for its existence. Ordinary members of the Supporters Club are members of the Club and the Committee of Management of the Supporters Club is comprised of persons who are also members of the Committee of Management of the Club including its President, or past presidents and life members of the Club. The financial relationships of the two entities are intertwined as evidenced by the fact that the Supporters Club could only borrow money with the approval of the Club.

[46] The fact that the loan has not been proceeded with, or that it might be taken in the name of the Supporters Club, does not alter the fact that the two are associated entities. If the loan is taken by the Supporters Club the funds will be used to refurbish the part of the Club’s premises that it occupies.

[47] Further, the fact that there may be a breakdown in interpersonal relationships between the members of the two Committees is not sufficient to justify a finding that they are not associated entities.

Did the Club make reasonable attempts to redeploy Mr Collie within the Supporters Club?

[48] The Supporters Club produced documents in relation to numbers of persons employed, and vacant positions in response to a Notice to produce issued at the request of Mr Collie. Those documents indicate that the Supporters Club employed 26 persons when this case was heard, and had advertised to fill two vacant positions and had employed four persons in the two months following Mr Collie’s dismissal.

[49] Mr Collie submitted that with his hospitality experience, the casual coaching role offered by the Club could have been combined with work available in the Supporters Club so that he could have been offered more than the 10 hours of work per week he was offered by the Club.

[50] Mr Richards said that he did not know how many persons were employed by the Supporters Club or the number of positions filled after Mr Collie’s dismissal. Mr Richards also said that he did not consider redeployment of Mr Collie within the Supporters Club because he did not think it was an associated entity and because there was a bad relationship between the two boards at the time Mr Collie was made redundant.

[51] Under cross-examination, Mr Richards agreed that notwithstanding that members of the committee of management of the Club also sit on the committee of management of the Supporters Club, there was no discussion about the possible redeployment of Mr Collie to a position with the Supporters Club.

[52] For the reasons set out above, the failure of the Club to consult Mr Collie about mitigation in relation to the loss of his position meant that there was little if any consideration of redeployment within the Club. The view taken by management of the Club that the Supporters Club was not an associated entity meant that there was no consideration whatsoever about redeploying Mr Collie within the Supporters Club.

Conclusion

[53] The Club has not established that the dismissal of Mr Collie was a case of genuine redundancy as defined in s.389 of the Act. Accordingly, the jurisdictional objection is dismissed, and the matter will now be listed for further hearing in relation to whether the dismissal was unfair.

DEPUTY PRESIDENT

Appearances:

Mr R. Collie on his own behalf.

Mr S. Richards on behalf of the Respondent.

Hearing details:

2014.

Brisbane:

March 14.

 1   [2010] FWA 3125.

 2   Exhibit 6 Annexure O.

 3   [2010] FCA 591, 11 June 2010.

 4   Ibid at 16-17.

 5   Exhibit 6 Annexure A

 6   Exhibit 6 Annexure F.

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