DECISION

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

Nathaniel Garang
v
Byron Bay Superfoods Pty Ltd
(U2016/11217)

Application for relief from unfair dismissal.

Introduction

[1] Mr Nathaniel Garang has applied under s.394 of the Fair Work Act 2009 (FW Act) for an unfair dismissal remedy in respect of the termination of his employment as a factory worker at Byron Bay Superfoods Pty Ltd t/a Wallaby Foods (Byron Bay Superfoods) in August 2016. The termination letter issued to Mr Garang on 15 August 2016, signed by Mr Peter Reed, the General Manager of Byron Bay Superfoods, read as follows:

“I am writing to inform you that your current position with Byron Bay Superfoods is being made redundant. Byron Bay Superfoods will not be replacing your position.

We are therefore notifying you of your 2 weeks’ notice effective today Friday 5 August 2016, your final day will be Friday 19 August 2016.

I would like to take this opportunity to thank you for your past service and we wish you well for the future.”

[2] Mr Garang contends that his dismissal was unfair, primarily on the basis that his purported redundancy was not genuine and that he had been dismissed because of his insistence that he be paid in accordance with the relevant modern award, the Food, Beverage and Tobacco Manufacturing Award 2010 (Award). Byron Bay Superfoods contends that the dismissal was a case of genuine redundancy and consequently could not be found to be unfair.

Evidentiary material

[3] The matter was the subject of a determinative conference before me on 14 March 2017 in Ballina. Mr Garang was granted permission to be represented by a solicitor, Ms G. Nicol. Mr Garang and his wife, Ms Amy Garang-Hall, made witness statements and also gave oral evidence at the determinative conference. Mr Garang also relied on a letter written by Ms Patricia Knight, his neighbour, statements (generally in the form of letters) written by five former employees of Byron Bay Superfoods, Mr Troy Wayne Delaney, Ms Caroline Nolan, Ms Robin Wright, Ms Kirkenys Atencio and Mr Terence Wright, and a reference from Ms Melissa Poynting. None of these persons attended the determinative conference, but notwithstanding this I determined to receive their documents into evidence. Byron Bay Superfoods filed witness statements made by Mr Peter Reed and by Ms Joy Crouch, who had been Mr Garang’s supervisor. Neither of these persons attended the determinative conference. Mr Paul Owies, the Managing Director of Byron Bay Superfoods, did not make a witness statement as such, but he was (together with Mr Reed) the author of various documents sent to the Commission at various times which set out Byron Bay Superfoods’ position as to various matters, and he attended the determinative conference as the respondent’s representative and gave evidence. I received these documents into evidence, except some documents of an evidentiary nature which Mr Owies sent to the Commission on 18 May 2016 in response to an invitation for Byron Bay Superfoods to make submissions about whether the dismissal was consistent with the Small Business Fair Dismissal Code. The documents did not relate to that issue and represented an uninvited attempt by Byron Bay Superfoods to re-open its case long after the determinative conference had been conducted and completed. There was no suggestion that these documents, or the information in them, were not available to Byron Bay Superfoods before or at the time of the determinative conference. I considered that it would be procedurally unfair to admit the documents into evidence in those circumstances, and accordingly I have not had regard to them in this decision.

[4] There is some difficulty in assessing the material before me because so many persons made witness statements or quasi-witness statements but did not attend the determinative conference and give evidence on oath or affirmation. I do not draw any adverse inference from the fact of any person’s non-attendance at the determinative conference alone; in relation to Mr Reed and Ms Crouch in particular, I accept that it was necessary for them to attend work to conduct Byron Bay Superfoods small manufacturing operation. I will give some weight to the statements of Mr Reed and Ms Crouch, particularly where they illuminate the position taken by Byron Bay Superfoods’ management at various times, but because those statements could not be tested I consider that they cannot be given weight to the extent that they can be relied upon in contradiction of the sworn testimony of Mr Garang. I can only give limited weight to the statements of the five former employees, because not only did these employees not give evidence on oath or affirmation but also their statements were only filed after Byron Bay Superfoods had lodged its evidentiary material, meaning that Byron Bay Superfoods did not have a proper opportunity to respond to them, and Mr Owies was not cross-examined about the matters in these statements. However I consider that they can be given some weight in the limited respects identified later in this decision.

[5] I consider that Mr Garang was a witness of credit. His evidence was clear, consistent, and supported by the limited amount of contemporaneous documentation that was available. Mr Owies’ evidence on the other hand was highly problematic. It was marked by inconsistencies and changes in position, and in important aspects was obfuscatory. In addition, the evidence discloses (as is discussed in detail later) conduct on the part of Mr Owies from 17 August 2016 onwards which was destructive of his credibility. Mr Reed’s witness statements can only be given limited weight for the reasons already explained. Generally speaking, where there is any conflict in the evidence, I prefer Mr Garang’s account to that of Mr Owies and Mr Reed. These matters will be expanded upon in the analysis of the facts of this matter.

Facts

Background

[6] Mr Garang was born in South Sudan. Due to civil war, he lost his father and a number of siblings and became a refugee at the age of four. He spent many years in a refugee camp in Kenya together with the remaining members of his family. He arrived in Australia on 1 June 2005 on a humanitarian visa with a number of his family members. He continues to assist in the financial support of one sister who remains in Kenya with her children. He met Amy Garang-Hall shortly after his arrival in Australia, and they married in 2008. They have three children. Mr Garang became an Australian citizen in 2009 and describes himself as “a proud Aussie”.

[7] Byron Bay Superfoods is a small food manufacturing business located in Bangalow in Northern NSW. It manufactures a number of snack foods which are marketed as health foods. These include Wallaby Bites, Superfoodie breakfast slices, Le Granola Bar, Superbar, Forager and Jumbles. A number of these products are “cold-pressed” - that is, made without any cooking process using raw ingredients. The business had less than 15 employees at the time of Mr Garang’s dismissal.

Employment of Mr Garang

[8] Mr Garang previously worked at a poultry processing plant at Byron Bay, but the plant was closed in 2014. He was then invited by Ms Crouch to work at Byron Bay Superfoods, and he commenced employment there on 4 August 2014. He was initially employed as a casual and paid $21 per hour. He was trained by Mr Delaney, who was also a casual, and performed a range of duties including packing, rolling, weighing, cutting and cleaning. After Mr Delaney and another employee left Byron Bay Superfoods in January 2015, Mr Garang remained as the principal worker in the rolling room, and in addition to the duties he had previously performed also cleaned machinery, utensils and trolleys and swept and mopped the floors. The rolling room was the area in which the cold-pressed products were produced. He was also assigned the tasks of training other casual employees to work in the rolling room, to keep time and record information. Mr Reed sought feedback from Mr Garang about the quality of new casual employees (of which there was a high turnover), and followed his advice as to whether they should continue to be engaged.

[9] In March 2015 Mr Garang was made a full-time employee. I infer that to this point that Mr Garang’s work was regarded as highly satisfactory by Byron Bay Superfoods management.

[10] Mr Garang’s evidence was that soon after he became a full-time employee, Ms Crouch began to treat him badly by bullying him, treating him as if he was dumb and speaking about him in a “nasty way” to other employees, including referring to black people as “coloured people”. He said he complained about this numerous times to Mr Reed, but nothing he did about it was effective because the behaviour continued. In her witness statement Ms Crouch made counter-allegations against Mr Garang, stating that he was very difficult to manage, that on a number of occasions he did not follow her instructions or issued self-modified instructions to other employees which involved shortcuts contrary to established processes, and that she “continued to have difficulties with Nathaniel which put me under great personal stress as I try very hard to maintain quality and safety of the product and Nathaniel was not taking note of what I said”. She likewise said that she complained to Mr Reed about this but the behaviour continued. Mr Reed’s witness statement also alleged that Mr Garang had difficulties in accepting instruction from Ms Crouch, and he attributed this to Ms Crouch’s gender, saying “This may stem from Nathaniel coming from a different culture”. It is clear that in making his witness statement Mr Reed had access to Ms Crouch’s witness statement, since he referred to it in his statement.

[11] Mr Garang denied that he treated Ms Crouch with disrespect because of her gender or that he refused to follow instructions. In Mr Delaney’s statement of 2 March 2017, he said that whilst employed by Byron Bay Superfoods, he never observed any problems in Mr Garang accepting instruction from Ms Crouch. In Ms Nolan’s undated statement, she said that Ms Crouch yelled at, abused and brought to tears herself and other employees while she worked there for four months in 2015, and that this behaviour caused her to resign. Ms Wright in her statement of 3 March 2017 also complained of bullying and abuse on the part of Ms Crouch when she was employed at Byron Bay Superfoods up until June 2014, and said that this contributed to a high staff turnover. Ms Atencio in her statement of 2 March 2017 simply said that Mr Garang was always respectful to all his co-workers, including female co-workers. She also referred to “despotic behaviour in management” but did not provide any particulars of this.

[12] There were no contemporaneous record of any of this alleged behaviour on the part of Mr Garang or Ms Crouch placed before me. Because most of the material I have referred to was not properly tested at the determinative conference for the reasons earlier set out, it is not possible to make any firm findings about the veracity of the various allegations, and in any event it is not necessary to do so. The most that may confidently be concluded is that there developed a poor working relationship between Mr Garang and Ms Crouch, and that this came to the attention of Mr Reed.

Dispute about pay entitlements

[13] Mr Garang said that after he became a full-time employee, his usual hours of work were 6.50am to 3.30pm, Monday to Friday, with a 30 minute unpaid lunch break. He was classified at Level 5 under the Award, and his hourly rate was $22.01, with a gross fortnightly wage of $1,673.08. He was only paid from 7.00am, but he said that Ms Crouch required him to be at his work station at 6.50am. The paid working hours meant that on a standard basis he was working approximately 40 minutes per day unpaid. Additionally Mr Garang said that he was often expected to work back after 3.30pm, sometimes for up to 5 hours per day. Mr Garang said he complained to Mr Reed and Ms Crouch about not being paid overtime, and Mr Reed responded by saying “We don’t pay overtime here, we are a small business we don’t have to”. Ms Garang-Hall corroborated Mr Garang’s evidence in part by attesting to his frequently long working hours, and this was also confirmed in the statement of his neighbour, Ms Knight.

[14] Mr Garang also said that after the factory re-opened after the annual closure in early 2016, Byron Bay Superfoods began a practice of requiring him from time to time to take a day off to cover for quiet periods in work, despite the fact that he was employed on a full-time basis and other casual employees remained at work. This occurred to the point where Mr Garang was frequently required to work only four days per week. Byron Bay Superfoods did not allow this to be accounted for as time off in lieu of the overtime Mr Garang was working, but instead required Mr Garang to take it as annual leave, notwithstanding his objections.

[15] Byron Bay Superfoods’ position, as set out in the statement of Mr Reed and in Mr Owies’ oral evidence, was twofold. First, it contended that Mr Garang was only entitled to the Level 2 rate under the Award, and that he had been advised verbally that “there might be times when he may work a little overtime”, but that this would be covered by the higher pay rate as a Level 5 he was receiving but was not actually entitled to. Second, it acknowledged that Mr Garang had been required to take some days off, but he had been paid for his days off in lieu in his final pay “as an act of goodwill”. Mr Garang’s response to this was firstly, he was entitled to paid at Level 5 because he held a Certificate III in Food Processing and, second, he only received the payment of his outstanding annual leave and some other moneys owing to him after he lodged his unfair dismissal application.

[16] I accept the evidence given by Mr Garang about his working hours and the way he was paid. Leaving aside the fact that he presented as a witness of truth, the limited material of an objective nature entirely confirmed his account. Byron Bay Superfoods presented an analysis it had prepared of Mr Garang’s hours of work from mid-March 2016 until his dismissal. In fortnightly periods in which Mr Garang worked full weeks, it demonstrates that he was regularly required to work a number of hours in excess of 76 per fortnight. Byron Bay Superfoods did not deny that he was not paid for this overtime in his fortnightly pays. While it is not necessary for me to make a finding about Mr Garang’s correct classification under the Award, he was able to produce a copy of his Certificate III in Food Processing, which he completed on 14 August 2013, and it is certainly the case that the Certificate III (or equivalent) is required by the classification definition of Level 5 under the Award - the classification at which Mr Garang was paid. The email which advised Mr Garang of his “final payslip” was dated 22 September 2016, in circumstances where Mr Garang’s termination letter advised him that his last day of work would be 19 August 2016 and he had filed his unfair dismissal remedy application (in which he had complained about not being paid his entitlements) in the Commission on 9 September 2016. That “final payslip” identified the payment of 80.8 hours of annual leave and 58.75 hours of “Hours in lieu paid out”.

[17] In July 2016 Ms Garang-Hall researched Mr Garang’s payment situation and made inquiries with the Fair Work Ombudsman’s office (FWO). On the basis of this Mr Garang formed the view that he was entitled to be paid for the overtime hours he worked, and that Byron Bay Superfoods was not entitled to make deductions from his accrued annual leave for the days it required him to take off. Mr Garang said he then made a formal complaint to the FWO, and spoke with one of its officers named Ann Lucey, who advised him to speak to Mr Reed about being paid in accordance with the Award. Mr Garang said he spoke to Mr Reed, who responded by saying “We are a small business we do not have to abide by the award but I will put you on as a casual employee”. Mr Reed did not deny this in his witness statement, and I accept Mr Garang’s evidence in this respect.

[18] Mr Garang’s evidence was that next, on 25 July 2016, he requested Ms Lucey to ring Mr Reed directly to explain to him what Mr Garang’s entitlements under the Award were. An email exchange between Ms Lucey and Mr Garang on that day demonstrates that Mr Garang authorised Ms Lucey to make contact with his employer on his behalf. Mr Garang said that Ms Lucey reported back to him later that day that she had spoken to Mr Reed in accordance with Mr Garang’s request and that Mr Reed had responded that he would put Mr Garang on as a casual, and she advised him that if this occurred he would have grounds for unfair dismissal. Again, there was no denial of this contact by Mr Reed in his witness statement. Mr Garang’s evidence concerning the conversation between Ms Lucey and Mr Reed is hearsay, but on the basis of Mr Garang’s evidence and the lack of any denial on the part of Mr Reed I consider that I can at least firmly find that the FWO contacted Mr Reed about Mr Garang’s entitlements under the Award on 25 July 2016.

[19] The next event, according to Mr Garang, was that on 2 August 2016 Mr Reed had a discussion with him during which Mr Reed said, among other things, that:

● Mr Garang complained too much, and no one else complained;
● he would be put onto casual;
● he was not controlling the other workers in the rolling room;
● he would be taken out of the rolling room and put into the packing room; and
● the business did not pay overtime and did not have to because it was a small business.

[20] Again, this was not contradicted in Mr Reed’s statement, and I accept Mr Garang’s evidence in this respect. On the days following this conversation Mr Garang was moved between the packing room and the rolling room.

The dismissal – competing versions of events

[21] The versions of events of Mr Garang and Byron Bay Superfoods diverge sharply in relation to the circumstances leading up to his dismissal and the true reasons for the dismissal. Mr Garang’s case was, in a nutshell, that Byron Bay Superfoods offered him a pay increase of $1,000 per annum to, in effect, acquiesce in the existing pay arrangements and cease complaining about them. He refused this offer and insisted on being paid according to the Award. This led to him being abruptly dismissed a few days later. Byron Bay Superfoods’ position (at least ostensibly) was that the cold pressing work which Mr Garang performed was declining, that it had offered Mr Garang the $1,000 increase as an incentive to be retrained in the use of new equipment for the production of baked products which it had acquired, that Mr Garang had refused to be retrained, and accordingly the business had no choice but to dismiss him on the grounds of redundancy. The resolution of this factual contest is the key issue in the proceedings.

Mr Garang’s version of events

[22] I will first set out Mr Garang’s version of events. Mr Garang said that on 10 August 2016, he made an inquiry of the payroll officer about how his pay was calculated having regard to the number of hours he worked. The payroll officer said she would speak to Mr Reed about it. At about 3.30pm that afternoon, Ms Crouch told Mr Garang that he had to see Mr Reed before he left work. Mr Garang went to Mr Reed’s office and a discussion occurred. There were no witnesses present and the door was closed. There was a dispute in the evidence about what occurred during this discussion. Mr Garang’s account of the conversation was as follows:

Reed: You’re telling other workers about OT and not being paid. I want it all to go away. I will increase your pay in the sum of $1,000 so you will work OT and have the days off when told to and you will stop complaining.

Garang: Is that weekly or yearly?

Reed: Yearly.

Garang: I just want to be paid in accordance with the award.

Reed: You are not to tell any other workers of this offer. Go home and think about it.

[23] Mr Garang denied that he was offered retraining during this meeting or at any other time, and said if he had been he would never have refused it. He pointed to his attempts to obtain Mr Reed’s support for him to obtain his Certificate IV in Food Processing as evidencing his willingness to undertake further training. He further denied that the $1,000 was offered as an incentive for retraining; he regarded it as “a bribe to not pursue a Fair Work complaint”.

[24] Mr Garang said that, on 11 August 2016, Mr Reed approached him in the locker room at the end of the day and said “Can we talk about the increase in pay for your position?” Mr Garang replied: “I don’t want the increase I want to be paid in accordance with the award”. That same day, Mr Garang noticed a shortfall in his pay. After a discussion with his wife that evening, Mr Garang sent a number of emails to Mr Reed. In the first email, Mr Garang said (omitting formal parts):

“In regards to your offer yesterday of a $1000 increase per year I formally decline.

I would like to be paid in accordance with the award as I have not been paid as such.”

[25] The other emails concerned Mr Garang’s complaints about his pay.

[26] On Friday 12 August 2016 Mr Garang was required to take another day off work. His next attendance at work was on Monday 15 August 2016. Mr Garang said that upon his arrival at work, Mr Owies called him into his office. Mr Garang said that a conversation to the following effect ensued:

Owies: I have discussed with Peter how you are not happy and you are backchatting. You’re telling other workers all about your pay, you are to go to us to talk about it. We do not pay overtime as we’re a small business and we don’t have to. You can be put on as a casual as you know we are making a new product good for marketing and we aren’t making any more bars so the rolling room will be discontinued.

Garang: I don’t want to be put onto casual, I just want to be paid correctly under the award.

Owies: We will make you redundant and you can then reapply for a casual position, we will make you fulltime again when we are busy again, go and see Peter he has a letter for you.

[27] Mr Garang said that he then left the office, and at about 7.15am Mr Reed handed him the termination letter, the text of which has earlier been set out. Mr Garang did not read the letter at this stage, and commenced his work. After about an hour and a half, Mr Reed came to him and said “Paul was saying for you to go home for the rest of the day and think about the letter”. Mr Garang ceased work, and was about to get into his car when Mr Reed approached him again and said “Nathaniel I misunderstood Paul, you can go back to work”. Mr Garang thereupon returned to work. He read the letter during his lunch break, and was shocked by it. He discussed the letter with his wife later that day, and they could not understand how the notice period could be backdated to start from 5 August 2016, so his last day would be Friday 19 August 2016.

[28] Mr Garang said he had begun to feel unwell that afternoon and had vomited a couple of times. He initially thought this was caused by the stress of the day’s events. However he continued to feel worse during the night. At 5.00am the following morning he called Ms Crouch to inform her that he was sick and would be going to see the doctor. He saw his GP, Dr Eric Chai, that morning, and was diagnosed with a gastric condition. Dr Chai said he should have four days off work, and was particularly concerned by the fact that Mr Garang worked with food. He gave Mr Garang a medical certificate dated 16 August 2016 which read:

“This is to certify that I have today examined: Nathaniel Garang, 3/7/1979 [address omitted]

In my opinion, Nathaniel will be unfit for normal work from Tuesday, 16 August 2016 to Friday, 19 August 2016 inclusive.”

[29] Ms Garang-Hall took a copy of the certificate and personally delivered it to Byron Bay Superfoods that day. After this, at about 3.30pm that afternoon, Mr Reed sent Mr Garang an email which, omitting formal parts, stated:

“We have received your Drs certificate covering the rest of the week.

Our solicitor has advised this is unacceptable behaviour and any time not attending work will be paid from any outstanding annual leave.

If at any time in the future we are called on to account for your work we will not be prepared [to] recommend you as an honourable person/employee, due to your recent dishonest behaviour.”

[30] Mr Garang felt intimidated and offended by this email, and did not respond. He had no further contact with Byron Bay Superfoods prior to the expiry of his notice period.

[31] In her evidence Ms Garang-Hall confirmed Mr Garang’s understanding of his termination letter, and his illness.

Byron Bay Superfoods’ evidence

[32] Mr Reed (in his witness statement) and Mr Owies (in his oral evidence) described the background to Mr Garang’s dismissal as being that the business had lost distribution rights with a number of major retailers and other clients for some of its cold pressed products, which reduced the amount of rolling work which was required to be performed. The business had invested in new machinery to make a number of new products. These products were produced by heat and did not require rolling.

[33] In his statement Mr Reed did not actually give a specific account of the meeting between himself and Mr Garang on 10 August 2016, or respond to Mr Garang’s account of that meeting. He simply said that “Nathaniel was offered a retraining role consistent with the machinery we purchased” but that “Nathaniel declined the training role and the $1,000 incentive to endeavour to keep him relevant”. He said:

“He was the only employee made redundant as he refused to be retrained and to learn other roles unlike other staff members who have been eager to retrain and learn the new machinery. The new machinery was installed at the factory June 2016. We could only put this down to Nathaniel having already made up his mind to leave, which was consistent with the chatter around the factory that Nathaniel was looking for another job and wished to leave.

We had been exploring ways to keep Nathaniel despite the major loss of distribution of our Superbars and Le Granola that required rolling and most of his time. This loss of business significantly reduced the amount of rolling hours required. The Superbars were in Coles and they were deleted in June 2016. The key was to retrain Nathaniel. We offered him a $1,000 pay increase to encourage him to retrain. He refused. He needed to retrain in line with the ad placed on 1 October 2016 and in line with the new machinery at the factory. He needed to gain experience in working with heat and hot surfaces. Up to this stage Nathaniel was only cold pressing or rolling which were not sufficient skills or competency to operate the new equipment.”

[34] While Mr Reed clearly linked the $1,000 offer with a requirement for Mr Garang to re-train, he did not specify the terms on which the $1,000 proposal was actually put to Mr Garang, and could not be asked about this because he did not attend the determinative conference. When this issue was raised with Mr Owies at the determinative conference, he gave evidence which can charitably be described as equivocal (emphasis added):

“Now he says a thousand dollars – well, I'll put this as neutrally as I can, his evidence was that the thousand dollars was an incentive to co-operate with the flexible working time arrangements and not complain about overtime along the way?---Well, look, unfortunately I'm unable to say what's – what his – what he thought but Peter Reed made it quite clear.  We discussed it internally with Joy.  We discussed it with Peter Reed and we came to a conclusion that we would offer Nathaniel a salary increase from – of a thousand dollars a year from his 43 and a half or whatever it was, to 44 and a half, to incentivise him.  Yes, there would be days when you've got to work a little bit extra but on the other side, there are days when you work a little bit less, it depends on – because we get orders from Coles and Woolworths on – one day might be very small, the next day it's something big.  So we make for each of those orders.  We don't keep a lot of stock.  So it's very hard for us to, I suppose, control the – or even the work out over a day to day period because we are at the mercy of what these big boys want.  The big boys say this, we jump and do it like they say.  So we do it as quickly as we can, put the freshest product on the market, rather than leave it in stock.  And the policy of the business was we didn't keep stock for no other reason but we wanted to have the freshest product and the best product on the marketplace.  And so that's why we would react quickly and that's why we were putting in – we put machinery in, so we could react quickly.

So just to be clear, those flexible working hours arrangements, you say were necessary for the business (indistinct) in response to - - -?---That's correct.

But was the thousand dollars for that be to - - -?---No.

Operate with the working arrangements or - - -?---No, the thousand dollars was to say, thanks, Nathaniel, for being with the business for a ready – as a full time employee for X number of months.  We're encouraging you to go the next stage and to look at the business in a different light, because we could see – we could see there were problems with Nathaniel.  He was complaining about things all the time to whoever, to Peter, et cetera, et cetera, regarding his – his pay and his conditions.  So we said to Nathaniel, listen, why don't we be – we knew that what – we knew that within six months there would be very, very little rolling.  We knew that there was – we had no – we had no control over that, at all, because the products, we knew, were going to a zero revenue curve, so we had to find something else for Nathaniel to do.  So it was an encouragement, a – just a small carrot of encouragement to keep Nathaniel fresh in the business.  I suppose in the manufacturing business we try to keep each of the staff members enthused and fresh by having our six weekly meeting, having our – every six months, having our lunches, having our Christmas party, little pay rise.

That's how we try to refresh the business.  All it was, was a refreshiner[sic], and that's all – the way I can explain it.  It's a refresher to – each of the staff members requires that, because it is hard.  You're in the same environment, day in, day out, even though it is a nice environment.  It's air conditioned, very nice, so it's clean, air conditioned, but it was – I can describe it as a refreshiner[sic].” 1

[35] It is far from clear from the above evidence, which is something of a word salad, that the payment of the $1,000 was in fact linked with a requirement to retrain, and the evidence can be read as drawing a direct link between the $1,000 and Mr Garang’s complaints about his pay arrangements.

[36] The material put before the Commission by Byron Bay Superfoods was also contradictory as to the business’ intention to retrain Mr Garang. Mr Reed’s statement, in the passage set out above, clearly indicated that it was intended to retrain Mr Garang to operate the new machinery which had been purchased. However in a document dated 13 January 2017, which was addressed “To whom it may concern” and signed by Mr Reed, it was stated (emphasis added):

“During his employment here at Byron Bay Superfoods from 4/8/2014 to 15/8/2016 I wish to state that Nathaniel’s role was limited to the rolling and pressing of bars and some product batching. Nathaniel gave an indication during 2016 that he did not wish to take on any extra responsibilities and I did not feel he had the capacity to be trained in more complex roles such as operating machinery particularly the new machinery delivered during 2016. With the move by the company away from bar products requiring new skills, Nathaniel’s role was made redundant. Prior to Nathaniel departing Byron Bay Superfoods it is noted that he was speaking with other staff members about leaving for another job.”

[37] That statement can only be read as meaning that Byron Bay Superfoods did not intend - and therefore would not have offered - to retrain Mr Garang in the operation of the new machinery. It may also be noted that there is no explicit reference to Mr Garang refusing retraining, but only a vague reference to him having given “an indication during 2016” that he did not wish to assume “any extra responsibilities”. When this statement was raised with Mr Owies, he said that what Mr Reed had meant was that there was some tasks associated with the new machinery that were “outside his [Mr Garang’s] scope”, but there were other “simple tasks” which Mr Reed had identified in connection with the new machinery that Mr Garang could perform. 2 However, that is not what Mr Reed said in the document.

[38] In his witness statement, Mr Reed attributed the decision to make Mr Garang redundant to his refusal to retrain:

“Nathaniel was offered a retraining role consistent with the machinery we purchased and in line with the new type of products being launched under Wallaby (to replace the products lost). The new products do not require rolling … The new machinery uses heat and required specific training. Nathaniel declined the retraining role and the $1,000 incentive to endeavour to keep him relevant at our company. As we were limited to the roles Nathaniel could perform due to his comprehension and as Nathaniel had no desire to accept training in new areas that we thought appropriate, [Byron Bay Superfoods] had no option to make Nathaniel redundant.”

[39] It was not made clear when this decision was made or who made it.

[40] There were significant inconsistencies in Byron Bay Superfoods’ evidence concerning the reason for the dismissal. For instance in one part of his evidence Mr Owies indicated that the difficulties in the relationship between Ms Crouch and Mr Garang was at least one major reason for the dismissal (emphasis added):

“… in the end because Nathaniel had some significant issues with Joy and Peter, and wouldn't retrain and that job of the cold press technology which was a dinosaur for us and was really being – was a redundant part of the business and is a redundant part of the business today, and has not been  - we have not – we have not re-engaged with anyone else to do that area, we had to let him go.  We had no other option.

Now it was very unfortunate that the letter that Peter Reed issued to Nathaniel had the wrong date on it.  The date on the actual letter was the correct date, 15 August, and …I sat down with Nathaniel on 15 August and explained the situation with Nathaniel.  We sat together for half an hour.  I thanked him for his work but I said we unfortunately had no option due to the various issues which I've already expanded on today.

You said issues with Peter.  What were the issues?---Well, look, the issues with Peter with Peter was that Peter had a difficult job as well to do because if – if Nathaniel would not follow the instructions of Joy Crouch who was his immediate supervisor, Peter had to spend a lot of time backwards and forwards with Joy, with Peter and with Nathaniel, and Peter spent a lot of hours on this case, a lot of hours on this case.  There was all – there was many meetings in Peter's office with Nathaniel, with Joy, joint tears, and in the end there's only so much that we can do.  There's only so much that we can give each individual member of a team, and if each individual member of a team does not want to play ball we've got to drop that ball.  And we dropped that ball because that player didn't want to be a team member.  So we told Nathaniel, you're dropped from the team.  And it was a very, very unfortunate thing we had to do.” 3

[41] Further, in an email to the Commission sent by Mr Owies on 7 March 2017 in response to Mr Garang’s material, Mr Owies identified yet another different reason for the dismissal (emphasis added):

“I also remind the applicant we are a small business as defined by small business and we are not required to pay redundancy for an employee who has been let go due to his inability to follow protocol within the business. Both the Supervisor and General Manager have provided evidence of this in that they had spoken to the applicant on numerous occasions but for some reasons the applicant was defiant in not following company protocol. He had very poor communication skills and there is the possibility that the applicant did not understand what was being instructed to him by his superiors.”

[42] Mr Owies was taken to this in his oral evidence, and he alleged that Mr Garang had not been following the business’ protocols for food production, although he did not provide any particulars as to what Mr Garang’s failures had been in this respect. 4 Mr Owies then gave the following evidence (in response to a question from myself):

“That appears to me that that is the reasons you were giving for his termination?---That was not the only reason for his termination.  The reason for his termination was, as I've expanded on, was partly his issues with Joy, and not following the strict instructions, and secondly, it can be quite easily seen over the time landscape, all the new machinery coming into the factory.  When we're talking about a factory changing, this factory has changed completely.  It's gone from cold press to nearly no cold press, to a new – different products and that is quite visible to everyone on the website.  You can see all the new products.” 5

[43] In relation to Mr Garang’s evidence that Mr Owies had told him he could be re-engaged as a casual (as, earlier, had Mr Reed), Mr Owies gave the following evidence (emphasis added):

“Prior to the termination did you as[k] Mr Garang to convert to casual employment?---I had not asked him to – we – we - - -

Or had the company, Mr Reed, anybody in the company?---Look, Nathaniel was a full-time employee.  Nathaniel had made – couldn't work with Joy and had advised Peter Reed that he's not happy, for whatever reasons it was.  And Peter may have said to him, "Why don't you go casual then?  Go casual, if you're not happy with work, with the flexibility required of a little bit more, a little bit less, and working within that type of framework, why don't you go casual?  There is no reason for us to be able to gesticulate[sic] that and – articulate that with each of the employees if they're not happy.  We had to come to some sort of an agreement and come to some sort of understanding.  So that could have very easily have been put to Nathaniel, "Why don't you go casual?"  "If you're not happy with your current employment, have you thought about going casual, like our other employees?"  That's what would have been put to him.” 6

[44] This evidence again places emphasis on the difficulties between Mr Garang and Ms Crouch, and Mr Garang’s complaints about his pay arrangements, as motivating factors in the Byron Bay Superfoods’ conduct.

[45] Although it was clear from the evidence that Byron Bay Superfoods had suffered a loss of demand for its cold pressed products over time, and had decided to invest in new equipment to produce new product lines, it was not clear that this had impacted upon the amount of work required to be done by Mr Garang as at the date of his dismissal. The new equipment had arrived in the factory in June 2016, but did not become operational until December 2016. Mr Garang was still working an average of about 38 hours per week performing rolling duties and other ancillary functions at the time of his dismissal. Byron Bay Superfoods continued to produce cold-pressed products after Mr Garang’s dismissal, and continued to do so even after the new equipment became operational, albeit in diminished quantities. Mr Owies was unable to give a coherent explanation as to the operational reason why it was necessary to dismiss Mr Garang in August 2016 as distinct from some later time. 7

[46] In relation to the actual manner in which the dismissal was effected, Mr Owies said in a letter signed by him, dated 13 January 2017 and addressed “To whom it may concern”:

“…The letter provided to Nathaniel by the General Manager of Byron Bay Superfoods contained a type error with respect to the start date of the notice period. The letter stated 5th August rather than 15th August in keeping with the date of the letter being 15th August 2016.

Secondly the 14 days’ notice period and notice should have concluded 29^th August rather than 19^th August as per letter. However at the meeting on 15^th August 2016 it was made clear that as we are a small business with less than 12 employees we are obliged to provide a two week notice period in redundancy. Having made this clear to Nathaniel that he is obliged to work the two weeks which equals the length of the notice period. We expected Nathaniel to be present for work for two weeks after the notice meeting dated 15 August. Nathaniel did not present for the last two weeks from 15^th August to 29^th August.”

[47] In his witness statement Mr Reed said:

“Nathaniel was given two weeks notice verbally and written on 15 August 2016 and he was obliged to work this notice period. Nathaniel chose to abandon his workplace. Even if one accepts the medical certificate despite Nathaniel seen playing with his children during the prescribed time of his sick leave. Nathaniel did not contact work or make any attempt to contact Peter the GM or Joy his immediate supervisor after 15 August 2016 and advise he could not attend the second week of his two-week obligatory period… Nathaniel abandoned his workplace and did not return or contact his employer after 15 August notification date.”

[48] Byron Bay Superfoods did not suggest that it attempted to correct in writing the alleged dating errors in the termination letter. It did not pay him for the four days from 16-19 August 2016 that were covered by his medical certificate.

[49] On 17 August 2016 Mr Owies sent a letter to the Executive Officer of the Medical Council of NSW which read as follows:

“Byron Bay Superfoods Company trading as Wallaby Foods is a food manufacturer based in the Byron Bay Shire.

Since 4/8 2014 the above company has employed Nathaniel Garang. From 4/8 2014 to 12/3 2015 Nathaniel was employed on a casual basis. From 12/3 2015 to present Nathaniel has been employed on a full time basis. In period 20/5/2015 to present time Nathaniel has had 2 days compassionate leave. Other than these two days in May 2015 Nathaniel who is a young ultra fit person has had no time off for either mental or physical incapacity.

On the 15 August 2016 Nathaniel for various reasons was made redundant and given due notice. Our factory management had advised that Nathaniel had recently indicated that he had found another job. On 16 August Byron Bay Superfoods received a medical certificate from Dr. Eric Chai that Nathaniel was unfit for work for the rest of the week which represents a period of 4 days off work.

On the afternoon of 15 August Nathaniel was seen playing with his family. He also attended work on the 15 August and worked a full day with no medical complaints and was observed by his management that he was in good physical condition.

Based on Nathaniel’s work history of over 2 years with no actual sick leave taken and based on our management knowing Nathaniel well we challenge the medical certificate issued by Dr. Eric Chai of the Bangalow medical centre. We believe this medical certificate has been written and issued without due medical process and there is no medical basis or evidence for issue of such a certificate for an extended period of 4 days. We challenge Dr. Eric Chai’s ethics and medical due diligence that support the issuance of a medical certificate that has been granted to Nathaniel for an extended period of time off work and challenge that this certificate is based on a medically unfounded diagnosis. I must highlight that over the last 2 years there is no evidence to suggest that Nathaniel has been receiving any regular medical attention for any mental or physical ailments.

We request an examination of the ethics and medical diagnosis behind Dr. Eric Chai’s practices that has led this doctor to issue a medical certificate for an extended period of time of 4 days.”

Findings re the dismissal

[50] I accept as truthful and accurate Mr Garang’s account of the discussions with Mr Reed on 10 and 11 August 2016, and on that basis I find that the $1,000 pay increase was offered to resolve Mr Garang’s complaints, including his complaint to the FWO, about his pay arrangements, and was not offered as an incentive for Mr Garang to retrain. I further find that Mr Garang rejected the increase because he wanted to be paid in accordance with the Award, not because he was refusing to retrain. I have reached these conclusions for the following reasons:

(1) Mr Garang, as earlier stated, presented as a witness of truth, and was clear and consistent about what happened at the discussions on 10 and 11 August 2016. There was no direct rebuttal of his account of the meetings by Mr Reed.

(2) Mr Garang’s account was supported by the contemporaneous email he sent to Mr Reed on 11 August 2016. That email confirms that he rejected the $1,000 offer because he wanted to be paid in accordance with the Award, and that he understood the offer related to his pay arrangements. The email says nothing about any refusal to retrain, and I do not accept that Mr Garang had any reason to refuse to retrain.

(3) Mr Reed’s witness statements only gave a generalised account of the alleged offer without identifying precisely when the offer was made or the terms in which it was communicated. Mr Reed’s non-attendance at the determinative conference meant that none of these matters could be clarified.

(4) Mr Reed’s contention in his witness statement that he offered the $1,000 increase as an incentive for Mr Garang to retrain to operate the new machinery is directly inconsistent with his statement in the 13 January 2017 document signed by him that he did not feel that Mr Garang had the capacity to be trained “in more complex roles such as operating machinery particularly the new machinery delivered during 2016”. For that reason his witness statement cannot be treated as credible in this respect.

(5) The oral evidence of Mr Owies about the purpose of the $1,000 offer was confusing and obfuscatory, and lacked credibility to that extent, but insofar as he could be understood as suggesting that the proposed payment did, at least in part, relate to Mr Garang’s complaints about his pay arrangements, it tended to confirm Mr Garang’s account and contradict that of Mr Reed.

[51] I accept that Byron Bay Superfoods faced a decline in the demand for its cold-pressed products, that it had invested in new equipment in order to produce new product lines, and that it may have been necessary for Mr Garang to engage in retraining to operate the new equipment in order to sustain his employment in the longer term. However, Byron Bay Superfoods’ case rested on the factual proposition that the reason it found it necessary to terminate Mr Garang’s employment was that his refusal to retrain meant that his employment had become unsustainable and his position redundant. I do not accept that this was the real reason for the dismissal because:

(1) Mr Garang did not refuse to retrain, and his rejection of the $1,000 offer did not represent any such refusal.

(2) The logical inference which is to be drawn from the timeline of events - the call by the FWO to Mr Reed on 25 July 2016, Mr Reed’s declaration to Mr Garang on 2 August 2016 that he complained too much and would be put onto casual employment, the proposal of the $1,000 increase on 10 August 2016 to resolve Mr Garang’s pay complaint, and Mr Garang’s rejection of the proposal on 11 August 2016 and his insistence that he wanted to be paid in accordance with the Award - is that the dismissal on 15 August 2016 was motivated to a substantial degree by Mr Garang’s complaints about his pay arrangements.

(3) I accept Mr Garang’s evidence concerning what Mr Owies told him were the reasons for the dismissal on 15 August 2016 - that is, that Mr Garang was not happy about his pay and was talking to other employees about it, and that he was being made redundant so that he could come back as a casual employee.

(4) Mr Owies’ evidence about the reasons for Mr Garang’s dismissal was again confusing and contradictory, but he at least made it clear that the reasons were not confined to the purported rejection of the retraining, and included the difficulties in the relationship between Mr Garang and Ms Crouch and alleged performance issues. He also suggested that the proposal for Mr Garang to become a casual (which was associated with the decision to dismiss him) was motivated by his unhappiness about the pay arrangements and the need to resolve this.

[52] I find that the real reasons for the dismissal were, first, to dispose of the problem raised by Mr Garang’s pay complaints concerning the non-payment of overtime in accordance with the Award and the requirement to take days off as annual leave (which Mr Garang had refused to resolve by accepting the $1,000 pay increase) and, second, the difficulties which had arisen in the working relationship between Mr Garang and his supervisor Ms Crouch. It is possible that there was a third reason, namely performance issues concerning a failure to comply with instructions, but it is difficult to identify the precise nature of those concerns and whether this was a problem separate to or overlapping with the difficulties between Mr Garang and Ms Crouch.

[53] I reject the factual contention advanced by Byron Bay Superfoods that the dates in the termination letter were the subject of a typographical error, and that the two weeks’ notice period was intended to commence on 15 August 2016 and end on 29 August 2016. It is beyond coincidental that both the start date and the finish date of the notice period were incorrectly typed, and that the incorrect dates happened to be two weeks apart. Moreover the letter correctly identified both the stated start date of 5 August 2016 and the stated end date of 19 August 2016 as being on a Friday, whereas the allegedly correct dates of 15 August 2016 and 29 August 2016 were on a Monday. I find that the letter correctly stated what was intended, namely that the two weeks’ notice period was to have a retrospective date of commencement. There was no attempt prior to 29 August 2016 to correct the letter, and I do not accept that Mr Owies said anything to Mr Garang on 15 August 2016 to make it clear that the two week notice period was to commence on 15 August 2016, not 5 August 2016. Mr Garang and Ms Garang-Hall were clearly of the understanding that the employment would end on 19 August 2016.

[54] I accept the evidence of Mr Garang and Ms Garang-Hall that Mr Garang fell ill on the afternoon of 15 August 2016 and remained ill for the rest of the week. The medical certificate which they obtained from Dr Chai on 16 August 2016 and supplied to Byron Bay Superfoods confirms their evidence. The assertion that an unnamed person saw Mr Garang playing with his children during the period of illness has no probative value and in any event is not necessarily inconsistent with his illness. There was absolutely no basis for the proposition stated in Mr Owies’ letter of 17 August 2016 to the NSW Medical Council that Mr Garang had advised that he had found alternative employment. The allegations made against Dr Chai in that letter were likewise, on the evidence before me, entirely baseless, and the contents of the letter in its entirety cast significant doubt on Mr Owies’ credibility. Mr Garang properly notified Byron Bay Superfoods of his illness before his normal starting time on 16 August 2016, and appropriately verified that illness. I find therefore that his employment ended on 19 August 2016 on the basis of the notice provided by Byron Bay Superfoods (notwithstanding that the notice provided was not consistent with s.117(3) of the FW Act). Further, Mr Garang was entitled to be paid personal/carers leave for the four days he was off work, but he was not paid it.

Post-dismissal events

[55] Mr Garang did not have alternative employment to go to after his dismissal, and applied to Centrelink for payment of the Newstart allowance. He was in difficult circumstances, having regard to the fact that his wife gave birth to their third child on 31 August 2016 and Byron Bay Superfoods had not paid him his outstanding wages or accrued annual leave. He experienced difficulty in obtaining the Newstart allowance because Byron Bay Superfoods did not provide him with a separation certificate, and he had to write a statement attesting to this fact and that he had not been paid his entitlements on termination.

[56] Mr Garang lodged his unfair dismissal claim on 9 September 2016, and the telephone conciliation was listed for 19 October 2016. As earlier stated, Byron Bay Superfoods advised Mr Garang of his “final payslip” by email on 22 September 2016. Mr Garang replied by email the same day saying he would go through and assess it, and added: “Peter can I be provided with a separation certificate? As not being provided this has further pushed my family into hardship” (although as it turned out Newstart payments had already been approved effective from 20 September 2016, but Mr Garang had not yet been informed about this). Mr Reed replied to this in a letter dated 26 September 2016 which stated (omitting formal parts):

“In response to your request for a separation certificate:

At this stage we are unable to provide a separation certificate as we are pursuing the perpetration of an alleged fraud and abandonment of your workplace which placed the business under undue hardship.

We are also in the process of submitting a statement to centrelink with respect to not being able to provide a separation certificate based on:

1. Outstanding case of alleged fraud

2. Abandonment of workplace

3. Offered casual work and $1000.00 increase pay as an incentive for training but this was rejected.”

[57] Mr Reed also sent the following letter to Centrelink on the same date (26 September 2016) which stated (omitting formal parts):

“Nathaniel Garang’s full time position at Byron Bay Superfoods was made redundant on Monday 15th August. Further to this we would like to advise the following:

1. Nathaniel has abandoned his workplace and has not returned to work to serve his notice period.

2. Byron Bay Superfoods offered Nathaniel casual work in place of full time work and he has rejected this offer.

3. 10^th August Byron Bay Superfoods offered to increase Nathaniel’s pay by $1,000.00 per annum as an incentive for re-training, however Nathaniel has rejected this offer.

4. Byron Bay Superfoods has an outstanding alleged fraud case pending with the medical review board.”

[58] Not content with this, Mr Reed sent a further letter to Centrelink on 9 November 2016 which repeated the above four propositions and advised of two additional propositions:

“…

5. Prior to his departure from our company various staff members have brought to our attention that his intentions were to leave the company as he was better off on centrelink payments than working.

6. We are unable to provide a separation certificate due to the above pending case and his abandonment of his workplace.”

[59] The purpose of a separation certificate is merely to confirm that the employee’s employment has terminated and to identify the reason for this. None of the matters raised in Mr Reed’s letters constituted any reason why Byron Bay Superfoods could not have issued Mr Garang with a separation certificate. The “outstanding alleged fraud case” appears to be a grossly exaggerated reference to the letter of 17 August 2016 to the NSW Medical Council, and the allegation that Mr Garang intended to leave his employment because he would be better off on Centrelink payments was simply an invention (and inconsistent with the assertions made elsewhere that Mr Garang was looking for or had found another job). When Mr Owies was invited to explain what the purpose of this correspondence was, he was unable to provide any credible explanation, although he did say “…that was advised to Centrelink because it ultimately was considered by Peter and Joy that this person may not wish to work. May not wish to work.” 8 The inference I draw from this (despite Mr Owies’ denial9) is that Byron Bay Superfoods, having dismissed Mr Garang from his employment, was now engaged in a malicious attempt to prejudice his chances of obtaining Newstart benefits.

[60] On 1 October 2016 Byron Bay Superfoods advertised in a local newspaper for a “Food Manufacturing Team Member”. The advertisement said the business sought a “fit dedicated individual to join its factory team, responsibilities to include various facets of manufacture”, and that “experience in the food industry, and in particular baking would be highly regarded”. Byron Bay Superfoods said there was no suitable applicant, and that Mr Garang’s position was never filled. On 17 October 2016 Byron Bay Superfoods announced on its website that one of its cold-pressed products, the “Wallaby Granola Bar French Vanilla with Sour Cherry”, had won the Snack Bar category of the 2016 Healthy Food Guide Awards.

[61] The file in this matter discloses that after the telephone conciliation in the matter on 19 October 2016, Mr Owies sent an email to the conciliator which relevantly stated:

“Please advise Garang of the following:

I wish to advise that Byron Bay Superfoods will not agree to anything other than the following. We cannot provide a separation certificate and reference until the matter is full[y] closed. As advised we have for Magistrates court [sic] against Garang for alleged fraud and costs. This matter will require Garang to have legal counsel and lengthy [sic].

We will agree to settle and cease the fraudulent claim and action and provide a separation certificate and reference if Garang accepts …”

[62] The balance of the email contained a settlement proposal which it is not necessary to disclose. The apparent reference in the email to legal proceedings against Mr Garang for fraud was an outright falsehood. There were no such proceedings. Mr Owies tried to explain this in his oral evidence by saying that what he meant was that Byron Bay Superfoods had advice from its lawyers that it had a cause of action in the “Magistrate’s Court” against Mr Garang for fraud in relation to the issue of the medical certificate and Mr Garang’s non-attendance for work after 15 August 2016, and that Byron Bay Superfoods was “in the process of taking action”, but ultimately decided not to do so. 10 I do not believe any of this to be true. Mr Owies’ email was an attempt to intimidate Mr Garang.

[63] The NSW Medical Council ultimately dismissed Byron Bay Superfoods’ complaint against Dr Chai.

[64] Byron Bay Superfoods’ conduct following the dismissal can only be characterised as vindictive. It is entirely inconsistent with the dismissal having been effected reluctantly on the grounds of redundancy, and it strongly tends to confirm the conclusions I have earlier reached about the real reasons for the dismissal.

[65] Mr Garang obtained the following alternative employment after his dismissal:

● On 19 November 2016 he got a job in a garden nursery, which was for three hours per week over a three week period. He earned a total of $221.30.

● On 21 November 2016 he obtained ongoing employment as a casual janitor, with variable hours, often late at night. Up until the week ending 12 March 2017 he had earned a total of $4,710.36.

● On 12 December 2016 he also obtained casual work at a manufacturing company which is continuing. Until the week ending on 12 March 2017 he had earned a total of $9,450.68.

[66] He has received a total of $3,131.30 in payments from Centrelink (which have been discontinued because of his employment earnings).

Preliminary matters

[67] Section 396 of the FW Act requires that four specified matters must be decided before the merits of Mr Garang’s application may be considered. In relation to s.396(a), Byron Bay Superfoods did not contend that the application was not filed within the 21-day period prescribed by s.394(2)(a). I have found that the employment ended on 19 August 2016, and the application was lodged on 9 September 2016, which was the 21^st day after that date. It was accordingly filed in time. In relation to s.396(b) there was no dispute, and I find, that Mr Garang was a person protected from unfair dismissal. In relation to s.396(c), the evidence established that Byron Bay Superfoods employed less than 15 persons at the time of Mr Garang’s dismissal, so it will be necessary to determine whether the dismissal was consistent with the Small Business Fair Dismissal Code (Code). In relation to s.396(d), Byron Bay Superfoods contended that Mr Garang’s dismissal was a case of genuine redundancy, so it will also be necessary to determine the correctness of that contention. Because the genuine redundancy contention constituted the main basis of the defence to Mr Garang’s claim of unfair dismissal, it is convenient to deal with that matter first.

Was the dismissal a case of genuine redundancy?

[68] The meaning of the expression “genuine redundancy” is defined in s.389 as follows:

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.

[69] I do not consider that any element of the above definition has been satisfied in this case. In relation to s.389(1)(a), it is necessary that the dismissal be genuinely motivated by the fact that the employer no longer required the dismissed employee’s job to be performed by anyone because of changes in the operational requirements of the business. If the real reason, as distinct from the ostensible reason, is not the circumstance identified in s.389(1)(a), then that element of the definition cannot be satisfied. I have earlier set out my findings concerning the real reasons for the dismissal, namely Mr Garang’s complaints about his pay arrangements, his refusal of the $1,000 offer to resolve his complaints, and the difficulties in his working relationship with Ms Crouch. I do not consider that the circumstance in s.389(1)(a) in truth constituted the actual motivation for the dismissal.

[70] Even if Byron Bay Superfoods had genuinely decided to make Mr Garang’s employment redundant, it did not satisfy s.389(1)(b). The Award applied to Mr Garang’s employment. Clause 9.1 of the Award provides:

9.1 Consultation regarding major workplace change

(a) Employer to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b) Employer to discuss change

(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 9.1(a).

(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

[71] Byron Bay Superfoods did not engage in any consultation with Mr Garang as required by clause 9.1 once it had made its (purported) decision to make his position redundant. It simply informed him of the decision on 15 August 2016.

[72] Nor did Byron Bay Superfoods comply with s.389(2), again assuming that it had genuinely decided to make Mr Garang’s employment redundant. On the basis of the case it advanced before me at the determinative conference, there was ostensibly no issue from Byron Bay Superfoods’ perspective that Mr Garang could have been redeployed to perform alternate duties utilising the new equipment subject to him undergoing retraining. Its position was that this was not possible only because Mr Garang had refused to retrain. I have previously found that this was not the case. Mr Garang never refused an offer to retrain, as such an offer was never made as alleged by Byron Bay Superfoods, and Mr Garang would have accepted retraining had it been offered. Accordingly redeployment would have been reasonable in all the circumstances.

[73] I find therefore that Mr Garang’s dismissal was not a case of genuine redundancy.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[74] In its response to Mr Garang’s unfair dismissal remedy application, Byron Bay Superfoods contended that the dismissal was consistent with the Code. However it did not subsequently make any submissions, either in writing or at the determinative conference, regarding the issue of compliance with the Code. On 11 May 2017 I caused an email to be sent to Byron Bay Superfoods noting this fact and inviting it to make written submissions regarding the company’s compliance with the Code within the following seven days. The email attached a copy of the Code. On 18 May 2017 Mr Owies on behalf of Byron Bay Superfoods sent the Commission a letter and number of documents in response, which, apart from confirming that Byron Bay Superfoods was a small business, did not address the requirements of the Code and instead sought to canvass the merits of the case yet again and introduce new evidence. As earlier discussed, I determined not to have regard to that material. Accordingly I will consider the issue of compliance with the Code based upon the materials admitted into evidence at the determinative conference.

[75] The Code provides as follows:

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

[76] The “Summary Dismissal” section of the Code was not applicable to Mr Garang’s dismissal. He was not dismissed on the ground of serious misconduct, there was no evidence that Byron Bay Superfoods held the belief that Mr Garang had committed serious misconduct, and he was not dismissed without notice.

[77] The dismissal was not consistent with the “Other dismissal” section of the Code. There was no valid reason for the dismissal. Mr Garang had not refused to retrain. Insofar as I have found that the difficulties in Mr Garang’s relationship with Ms Crouch was a reason for the dismissal, the evidence before me does not permit the conclusion that this situation was Mr Garang’s fault and thereby justified his dismissal, for the reasons already stated. The contention that there had been a failure on Mr Garang’s part to follow instructions never rose beyond the level of assertion. It was not even particularised let alone proven. None of the procedural requirements of the Code were complied with. There was no evidence that Mr Garang was ever warned that he was at risk of dismissal, or given an opportunity to respond or rectify any problem.

[78] I find that the dismissal was not consistent with the Code.

Was the dismissal unfair?

[79] Having dealt with the preliminary matters identified in s.396, consideration may now be given as to whether the dismissal was unfair. Section 387 of the FW Act requires the Commission, in considering whether a dismissal was harsh, unjust or unreasonable, to take into account a number of matters specified in paragraphs (a) to (h) of the section. I will deal with each of these matters in relation to Mr Garang’s application in turn below.

Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (s.387(a))

[80] For the reasons earlier outlined in relation to whether the dismissal was consistent with the Code, there was no valid reason for Mr Garang’s dismissal related to his capacity or conduct. Byron Bay Superfoods did not contend that such a reason existed.

Whether the person was notified of that reason and was given an opportunity to respond to any reason related to the capacity or conduct of the person (s.387(b) and (c))

[81] Mr Garang was not notified of any reason for his dismissal based on his capacity or conduct, and accordingly had no opportunity to respond.

Whether there was any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal (s.387(d))

[82] The only discussion relating to Mr Garang’s dismissal was that which occurred between him and Mr Owies on 15 August 2016. There was no express refusal of the presence of a support person, but the lack of any notice of the meeting and its purpose meant that Mr Garang was not given a reasonable opportunity to bring a support person with him.

If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal (s.387(e))

[83] There was no evidence that Mr Garang was warned about any unsatisfactory performance on his part prior to the dismissal.

The degree to which the size of the employer’s enterprise or 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 (s.387(f) and (g))

[84] Byron Bay Superfoods is a small business employer without any human resource management personnel, and this undoubtedly had an impact upon the procedures followed in effecting the dismissal.

Any other matters that the Commission considers relevant (s.387(h))

[85] I consider the following matters to be relevant and to militate in favour of a finding that Mr Garang’s dismissal was unfair:

(1) Insofar as I have found that one of the real reasons for the dismissal was Mr Garang’s complaints that he was not being paid in accordance with the Award (which included a complaint to the FWO), the dismissal was prima facie unlawful, being in breach of s.340(1) of the FW Act.

(2) The reasons given for the dismissal were not the true reasons, and the true reasons did not provide any proper basis for a fair dismissal.

(3) Mr Garang suffered significant financial loss as a result of the dismissal.

Conclusion

[86] I find that Mr Garang’s dismissal was harsh, unjust and unreasonable. It was not a genuine redundancy. There was no proper basis for the dismissal. The dismissal was prima facie unlawful. Mr Garang was denied any form of procedural fairness. The dismissal caused him significant financial loss.

Remedy

[87] I do not consider that reinstatement is an appropriate remedy. Mr Garang has no desire to return to his employment with Byron Bay Superfoods. I do not consider that there is any prospect that a viable working relationship could be re-established, having regard to the circumstances in which the dismissal occurred and Byron Bay Superfoods’ vindictive conduct towards Mr Garang afterwards.

[88] I consider that the award of compensation to Mr Garang would be appropriate given that his unfair dismissal has caused him financial loss. It is therefore necessary for an assessment to be made as to the amount of compensation which should be ordered. In assessing compensation, it is necessary under s.392(2) of the FW Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a)-(g) of the subsection, and it is also necessary to consider the other relevant requirements of s.392.

[89] At the end of the determinative conference I invited the parties to make submissions about compensation, in the event that I decided that the dismissal was unfair. To assist them in that task, I provided the parties with a copy of s.392, and drew their attention to the specified criteria for the assessment of compensation. Mr Owies only addressed s.392(2)(a) (that is, the viability of Byron Bay Superfoods), and did not address any other matter pertaining to compensation. Mr Garang was allowed to file a further written submission regarding compensation within seven days, and Byron Bay Superfoods was allowed to file a submission in reply within a further seven days. Mr Garang filed a submission which set out comprehensively the compensation which was claimed and the basis upon which it was calculated, but the reply submission from Byron Bay Superfoods merely re-agitated the merits of the case. I am concerned that Byron Bay Superfoods has not yet properly turned its mind to the issue of the assessment of compensation. I propose therefore to express my provisional views concerning compensation, and then allow the parties a further opportunity to provide written submissions in response before I make any final compensation order. My provisional assessment of compensation will be undertaken using the methodology elaborated upon in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. 11

Remuneration that would have been received if the dismissal had not occurred (s.392(2)(c))

[90] If Mr Garang had not been dismissed, I see no reason why he could not have been retrained in the use of the new equipment, and performed a wider range of duties to supplement the declining rolling work associated with the cold-pressed products. Byron Bay Superfoods attempted to portray Mr Garang as an uneducated person with few skills and limited comprehension of English who could not be trained to perform the more complex tasks, but I do not accept this. Mr Garang possessed a Certificate III in Food Production, had had many years’ experience in the food industry, and the former employees of Byron Bay Superfoods attested to his competence. He did not display any difficulty in understanding English when he gave evidence at the determinative conference.

[91] However having regard to Mr Garang’s difficulties in his relationship with Ms Crouch, and his unhappiness concerning the pay arrangements, I do not consider that Mr Garang would have stayed in employment with Byron Bay Superfoods indefinitely. I consider it is likely that he would have left when he had found suitable alternative employment. My best estimate is that the employment would have continued for another six months if Mr Garang had not been dismissed.

[92] Mr Garang’s gross fortnightly pay at the time of his dismissal was $1,673.00. Over a period of six months he would therefore have earned $21,749.00.

Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))

[93] For the period until the end of the estimated six month period of further employment if there had been no dismissal (a period ending on 19 February 2017), Mr Garang’s analysis of earnings from alternative employment showed that he had earned a total of $11,054.16 ($221.30 + $3,955.97 + $6,876.89). I would not count the Newstart payments as remuneration earned since the dismissal, since it is possible that Mr Garang will have to repay them upon receiving a compensation order in his favour. I would deduct the alternative employment earnings, which would leave a compensation amount of $10,694.84 ($21,749.00 - $11,054.16).

[94] Because the six month period of estimated further employment ended on 19 February 2017, there is no need to take into account and remuneration earned or likely to be earned after that date.

Other matters (s.392(2)(g))

[95] I do not consider that there would be any basis for further deductions for “contingencies”. In relation to taxation, compensation should be determined as a gross amount and it should be left to Mr Garang to pay any amount of taxation required by law.

Viability (s.392(2)(a))

[96] Mr Owies asserted at the determinative conference that the Byron Bay Superfoods business was on a “knife’s edge”, that it had a $100,000 debt it owed to Coles because of recalled product, and the business was “on the brink of not being a going concern at the moment”. 12 Because there was no evidence of these matters, and also because of the concerns I have earlier expressed about Mr Owies’ credibility, I would not reduce the amount of compensation on this score. However I would deal with any issues about the viability of Byron Bay Superfoods by requiring the payment of compensation in instalments, as discussed below.

Length of service (s.392(2)(b))

[97] Mr Garang’s period of service does not justify any adjustment to the amount of compensation that might otherwise be ordered.

Mitigation efforts (s.392(2)(d))

[98] I am satisfied that Mr Garang has mitigated his loss by seeking and obtaining alternative employment.

Misconduct (s.392(3))

[99] Mr Garang did not commit any misconduct, so no deduction is required under s.392(3).

No component for shock, distress, humiliation or other analogous hurt (s.392(4))

[100] I confirm that the compensation amount provisionally assessed contains no component for any shock, distress, humiliation or other analogous hurt suffered by Mr Garang as a result of the manner of his dismissal.

Compensation cap (s.392(5))

[101] The amount of compensation proposed is below the compensation cap.

Instalments (s.393)

[102] I consider that the compensation should be paid in four equal monthly instalments.

Conclusion - provisional assessment concerning compensation

[103] My provisional view is that a compensation amount of $10,694.84 would be appropriate in all the circumstances.

Further submissions

[104] As earlier stated, I will allow the parties a further opportunity to make written submissions on the issue of the quantification of compensation only, taking into account the provisional assessment made above. Any such submissions shall be lodged within seven days of the date of this decision. I will then make a final determination of the compensation amount having regard to those submissions.

Other matters

[105] I note Mr Garang in his submissions concerning the compensation amount has included a claim for payment of his legal costs and disbursements. Any application for costs must separately be made in accordance with s.402 of the FW Act, and must address the requirements of s.400A and/or s.611. Therefore that is not a matter I will deal with until my final determination as to compensation has been made.

[106] I further note that Mr Garang claims he was not paid certain Award and NES entitlements during his employment with Byron Bay Superfoods. I am not empowered to deal with those claims in the context of determining an unfair dismissal remedy application. If Mr Garang wishes to pursue those claims, he will have to make an application for their recovery in a relevant court. 13

VICE PRESIDENT

Appearances:

G Nicol for Nathaniel Garang.

P Owies for Byron Bay Superfoods Pty Ltd.

Hearing details:

2017.

Ballina:

March 14.

 1   Transcript 14 March 2017 PNs 420-424

 2   Transcript 14 March 2017 PN 706

 3   Transcript 14 March 2017 PNs 398-400

 4   See Transcript 14 March 2017 PNs 407-408. On one reading of his evidence, Mr Owies was suggesting that Mr Garang had not worn his hair net on occasions, but this is unclear.

 5   Transcript 14 March 2017 PN 412

 6   Transcript 14 March 2017 PNs 428-429

 7   See Transcript March 14 2017 PNs 413-419, 461-468

 8   Transcript 14 March 2017 PN 622

 9   Transcript 14 March 2017 PNs 623-624

 10   Transcript 14 March 2017 PNs 625-639

 11   [2013] FWCFB 431; 229 IR 6

 12   PNs 798-811

 13   See items 1 and 2 in the Table in s.539(2) of the FW Act

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