[2014] FWC 7576
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Leanne Lawrence
v
Trustweld Engineering Pty Ltd
(U2014/10049)

VICE PRESIDENT WATSON

MELBOURNE, 30 OCTOBER 2014

Application for unfair dismissal remedy - Whether termination of employment harsh, unjust or unreasonable - Whether valid reason for dismissal - Dismissal related to operational needs of the business - Application dismissed - Fair Work Act 2009, ss. 394 and 387.

[1] This decision is an amended version of a decision given in transcript on 23 October 2014 in relation to an unfair dismissal application under s.394 of the Fair Work Act 2009 (the Act) by Leanne Lawrence in relation to the termination of her employment with Trustweld Engineering Pty Ltd (Trustweld).

[2] The parties are agreed in this matter that the question that needs to be determined by the Commission is whether that dismissal was harsh, unjust or unreasonable and no other issues apart from possibly remedy appear to arise. The objects of Part 3-2 of the Act make it clear that the determination of this question should be undertaken in a way that gives effect to the objective of ensuring there is a fair go all round, taking into account the interests of the employee and the employer.

[3] In determining whether a dismissal is harsh, unjust or unreasonable, the Commission is required by s.387 of the Act to take into account the factors set out in paragraphs (a) to (g), as well as any other matters that the Commission considers relevant to the circumstances of the case. I agree with the submissions of the parties that most of the factors that are set out in s.387 either have no real application or have limited significance in the circumstances of this matter. That is because the reason for the termination is not on account of capacity or conduct. It is on account of operational reasons arising from a restructure of Trustweld's business and the reduction of the number of employees in the business, specifically those performing the administrative roles within the office of the business. I consider that there is no valid reason relating to capacity or conduct simply because that was not the reason relied on by the employer to justify its decision to dismiss.

[4] It follows that notification of such a reason and matters going to opportunities to respond and whether warnings had been given et cetera are similarly not relevant to the circumstances of this case. In my view, the operational reasons are the focus. They are the reason for the termination and the circumstances, including the selection of Ms Lawrence for redundancy in preference to Ms Krieger, are factors which should be viewed in the context of the operational reason.

[5] I do however consider that factors (f) and (g) have some application, but I accept the submission of Mr O'Neill that there is probably limited significance in those matters given that Mr Nick Vitale obtained advice from Victorian Employers' Chamber of Commerce and Industry (VECCI) in relation to the procedures he should adopt in implementing the redundancies. I do not propose to summarise all of the circumstances of this matter in this decision.

[6] I think in general terms the relevant circumstances are that Ms Lawrence had been performing the administrative role for a considerable period of time. She was originally the only person performing that role. However, the growth of the business led to the requirement to employ another employee in a similar role. Ms Krieger was employed in that role and I find on the evidence that Ms Lawrence trained Ms Krieger in the various administrative duties that fell within their responsibilities.

[7] Ms Lawrence being the more senior person did perform a leadership role in relation to the administrative duties until her absence of approximately 7 months on account of illness when Ms Krieger performed the role on her own. Ms Lawrence returned to work on a part-time basis as part of a return to work plan in April 2014 and shortly after, in June 2014, the employer decided to make a number of employees redundant and decided to retain Ms Krieger and terminate the employment of Ms Lawrence.

[8] Mr Nick Vitale's evidence related to his reasons for preferring to retain Ms Krieger. Those matters related to a comparison of skills and also flexibility in roles in the administrative functions required by the business. There was some mention of other factors in the witness box today. I think a proper assessment of that evidence was that Mr Nick Vitale, while not being critical of Ms Lawrence's performance in any way, did accept that there might have been some shortcomings that might have been attributed to memory loss. However, it does not appear to me on the evidence that those factors were significant operative factors in the selection that he made.

[9] Mr Nick Vitale made the decision to select the employee to be retained, in consultation with the managing director Mr Ross Vitale, and the decision therefore should be viewed as one which was reached at the senior management levels of the company, Mr Nick Vitale being the most relevant in terms of that decision but not the only decision maker. As I said earlier, I think the relevant matters are really other matters for the purposes of s.387 and I consider that they involve a number of considerations.

[10] The first of those is whether it can be said that there was a valid reason for the termination because of operational reasons. On the evidence, I find that there was a valid reason relating to operational reasons. That business did undertake a restructuring, it did reduce the number of administrative employees, and it has not altered that position since.

[11] The second factor is whether the employer complied with obligations, fairness obligations as well as award obligations in relation to consultation. In relation to a redundancy, the essence of an obligation to consult is that a decision should be communicated to those affected by it, and an opportunity should be given for the employees to have input into that decision either in a fundamental way or in a procedural way, and an opportunity to consult with the employer in relation to ways to either avoid the consequences of the redundancy or minimise the adverse impact of the redundancy.

[12] That obligation does involve something quite different to presenting a fait accompli to the workforce and simply advising and then implementing a decision. It does involve requesting employees to make any comments they wish to and having genuine regard to any input provided by employees, given the opportunity that was provided. I find on the evidence in this matter that the procedure is lacking the opportunity given to employees to have input into the decision.

[13] In the context of this matter, an opportunity for input might have enabled employees such as Ms Lawrence to indicate their relative strengths, their preparedness to work in different roles that might be required or perform other work, and to take into account clearly relevant factors going to selection, with the benefit of the input of the employees concerned. I find that the failure to undertake that consultation in that manner is a negative factor in terms of the overall fairness of the termination.

[14] The next factor that I consider is relevant is the question of selection for redundancy itself. I find on the evidence that Mr Nick Vitale in consultation with Mr Ross Vitale undertook a bona fide assessment of Ms Lawrence and Ms Krieger. It is not for this Commission to determine what choice it would have made and what weight it might have given to factors such as seniority and track record and length of employment. But I do not find that the selection process, either its methodology or its execution, was unfair and I do not find that the outcome of that selection process has been established as being unfair either.

[15] Related to that factor is the size of the business and the decision making processes. These clearly were matters for the business. It is a family business and with a small number of employees who certainly in good times are treated as part of the family, but a difficult decision needed to be made and I am satisfied that taking into account all the circumstances the selection was not unfair.

[16] It is also alleged that the selection was in bad faith in that it involved other factors. I am not satisfied that that has been established in this case. I accept the evidence of Mr Nick Vitale that he was faced with a difficult decision. He looked at legitimate and proper factors relating to skills and made an assessment of who he preferred - and Mr Ross Vitale supported - to be retained in the business and the other person who unfortunately needed to be let go in the circumstances.

[17] Relevant also to the selection was the illness suffered by Ms Lawrence prior to her return to work, and the circumstances really being that the termination occurred during the period of recovery and return to full-time work. Ms Lawrence, with some justification, believes that if it was not for the illness, if it was not for being absent for that period at a time when business circumstances were not great, her prospects of being retained were reduced as a result. There may be a sound basis for that belief.

[18] Circumstances may have been different if the illness had not occurred. However, I am satisfied that the illness was no part of the decision of the employer, and although there was clearly a significant personal impact and a significant shock in being selected for redundancy in a very difficult time that Ms Lawrence was facing at the time, I do not believe that that amounts to a factor that leads to the conclusion that the termination of employment and the selection of Ms Lawrence for redundancy was unfair.

[19] I take into account all of those factors in a global sense for determining whether the dismissal was harsh, unjust or unreasonable, and in all of those circumstances and despite what I have said about the consultation process I am not of the view that the dismissal was harsh, unjust or unreasonable. In view of that finding it is appropriate that the application in this matter be dismissed. An order to this effect is issued in conjunction with this decision (PR557023).

VICE PRESIDENT WATSON

Appearances:

Mr R. O’Neill, with Ms M. Vizelman, for Leanne Lawrence.

Ms N. Howells-Schramm, with Ms K. Tucker, for Trustweld Engineering Pty Ltd.

Hearing details:

2014.

Morwell.

23 October.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR557022>