DECISION

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

Mr Muhammad Buttar
v
PFD Food Services Pty Ltd T/A PFD Food Services
(U2017/6700)

Dismissal harsh, unjust or unreasonable – remedy not agreed through conciliation – decision on remedy – genuine redundancy but failure to redeploy - reinstatement to another position not inappropriate – orders made

[1] By decision of 24 August 2017 1 the Fair Work Commission (the Commission) found that Muhammad Buttar’s dismissal on 2 June 2017 by PFD Food Services Pty Ltd (PFD) was harsh, unjust or unreasonable. In doing so, I dismissed the employer’s threshold claim that Mr Buttar’s dismissal was a genuine redundancy within the meaning of the Fair Work Act 2009 (FW Act).

[2] The matter had proceeded directly to arbitration at the employer’s request for its claim of genuine redundancy to be dealt with as a threshold issue. I decided both the threshold issue and the merits. On remedy, I said as follows:

[81]     In these circumstances, I consider it appropriate to defer making a decision on remedy in order to enable the parties to consider, in light of this decision, whether they wish to avail themselves of a conciliation process that could lead to a settlement on the question of remedy. The Commission will make available to the parties, if they so choose, a further process of member-assisted conciliation conducted by a member of the Commission other than myself. Should that process not be undertaken or not successful, I will make a decision on remedy and issue appropriate orders. 2

[3] At a Directions Hearing on 28 August, Mr Buttar and PFD indicated a willingness to participate in Member Assisted Conciliation on the question of remedy. Member Assisted Conciliation was conducted on 1 September 2017 by Commissioner Platt. Conciliation did not resolve the matter. I now determine the question of remedy.

[4] I took evidence at the primary hearing on all issues in dispute, including remedy. Following the conciliation on remedy, I provided the parties a further opportunity to make submissions on remedy. 3 Each did so.4

[5] In arriving at this decision I take into account all of the evidence and submissions that were before me at the primary hearing, and the further written submissions on remedy. I adopt the findings and conclusions of my primary decision of 24 August as terms of this decision, without repeating them.

[6] I found there was a valid reason for Mr Buttar’s dismissal on the ground of redundancy. 5 However, I concluded that the redundancy was not a genuine redundancy within the meaning of the FW Act on two grounds: firstly, that PFD had failed to comply with its legal obligation to consult about the redundancy6; and secondly, that it failed to fulfil its legal obligation to redeploy Mr Buttar in the employer’s enterprise given that it would have been reasonable in all the circumstances to have done so.7

[7] Overall, I found these failures sufficiently serious to conclude that Mr Buttar had not been provided a fair go all round. 8 There was no other reason for dismissal. He was not dismissed on performance grounds.9 He did not contribute to his dismissal, substantively or procedurally. He was a well-regarded and conscientious employee.10 He had worked for PFD for 2 years and 4 months and had been promoted in that time to a salaried position as Production Supervisor. His dismissal was harsh, unjust or unreasonable.

Legal Principles on Remedy

[8] In determining the question of remedy, I am required to apply the provisions of Division 4 of Part 3-2 of the FW Act. Section 390 provides as follows:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The Commission may make the order only if the person has made an application under section 394.

(3) The Commission must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.”

[9] In this matter, the requirements of subsections (1) and (2) have been met. Mr Buttar has made an application under section 394; I have found that he was protected from unfair dismissal at the time of being dismissed 11; and I have found that he was unfairly dismissed.12

[10] A decision to order a remedy for unfair dismissal is discretionary. 13 Subsections (1) and (2) provide that the Commission “may” make an order. The statute does not provide that the Commission shall do so.

[11] Having regard to the findings of my primary decision, and in particular my conclusion that Mr Buttar was denied a fair go all round, I am satisfied that I should exercise my discretion in favour of granting a remedy.

[12] The only remedies I am required to consider are reinstatement under section 391 of the FW Act or compensation under section 392. I am required by the provisions of section 390(3) to not order compensation unless I am “satisfied that reinstatement of the person is inappropriate”. 14

[13] An order for reinstatement can be either an order appointing the person “to the position they were employed immediately before the dismissal” 15, or to “another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal”16.

[14] I am empowered to make orders for reinstatement against an associated entity of the employer in the circumstances provided for in section 391(1A). In this matter, that issue does not arise.

[15] If making a reinstatement order, the Commission has discretion to make ancillary orders maintaining continuity of employment and restoring lost pay because of the dismissal. 17

Is Reinstatement Inappropriate?

[16] Mr Buttar seeks an order for reinstatement to his former position accompanied by an order to restore lost pay and to maintain continuity of service. In the alternative, he asks me to order that he be re-employed by PFD in another position suitable to his skills on terms and conditions no less favourable. He says that he is confident he can restore relations with the employer and fellow workers, and holds no personal animus towards Mr DeCasto. 18

[17] PFD oppose an order for reinstatement. It says Mr Buttar’s former job no longer exists. It says there are no alternative positions available. It says that the employment relationship has been “broken beyond repair” 19.

[18] As a general proposition, it is inappropriate to order reinstatement if the employment relationship has irretrievably broken down and there are no reasonable prospects of it being restored 20. Trust and confidence is a necessary ingredient in an employment relationship. The mere fact, however that an employer asserts that trust and confidence has been eroded to such an extent that the relationship is irretrievable is not, in itself, a sufficient ground on which to conclude that reinstatement is inappropriate. An objective consideration of the question needs to be conducted and the conclusion reached should be soundly and rationally based.21

[19] Further, mere embarrassment or difficulty on the part of the employer is not necessarily indicative of a loss of trust or confidence sufficient to render the employment relationship irretrievable 22.

[20] I accept that relationships between PFD and Mr Buttar are strained. I give weight to PFD’s submission in this regard. I accept this is particularly so insofar as the relationship with PFD’s State Manager who made the decision to dismiss, Mr DeCasto. While Mr Buttar believes he can resume working with Mr DeCasto, who he once regarded as a mentor, the events of 2 June as well as this litigation have placed that relationship under severe strain. Litigating his dismissal as a self-represented applicant required Mr Buttar to cross-examine Mr DeCasto, which both parties found uncomfortable. I also acknowledge, and give some weight to PFD’s submission that the relationship with another manager, Mr Chiu, is also strained. I do not, however give weight to PFD’s concern 23 that Mr Buttar’s evidence referred to salaries paid to other employees. There is no evidence before me to reliably find that this information was improperly obtained, nor was it irrelevant to his case.

[21] I also give weight to PFD’s submission 24 that there were genuine operational reasons for the business restructure in the Adelaide Fish Room. I accept that reinstatement would reintroduce an ongoing labour cost that the employer has sought to eliminate. However, I do not consider the remuneration of one supervisor to present a “dramatic impact on financial viability”25 as claimed by PFD.

[22] In considering whether reinstatement is inappropriate, I am required to take into account all of the evidence and material before me. 26 Aside from my finding that relationships are strained and that reinstatement would re-introduce a labour cost that had been sought to be saved, the findings of my primary decision are relevant as well as the following matters:

22.1. Mr Buttar’s evidence, which I accept, is that he readily developed friendly and productive relationships with those with whom he worked on a day-to-day basis. Only managerial roles report directly to Mr DeCasto. Mr Buttar was a supervisor, not a manager. Mr Chiu is a national manager with whom Mr Buttar interacted but not as his direct report;

22.2. Mr Buttar’s employment record is unblemished. There was no element of the dismissal or Mr Buttar’s employment record that concerned performance or conduct. Trust, assessed objectively, in the performance of duties is not damaged. He was regarded as conscientious and capable. PFD promoted him after only six months as a general hand to production supervisor and then engaged him as a salaried employee. There is no evidence of counselling or warning. If reinstated, there is no basis to conclude that he would be other than diligent and capable;

22.3. Mr Buttar has a strong work ethic and value system. He is ready, willing and able to work. That is the remedy he seeks, notwithstanding the discomfort of these proceedings. His evidence, which I accept, was that he eagerly used his varied skills in production, computing and fork-lift driving to the benefit of the business. He was comfortable in taking responsibility for factory close down in the evenings. He did not claim unemployment benefits from Centrelink after being dismissed because, as a relatively new migrant to the country, he said he preferred to work and not burden the Australian taxpayer;

22.4. Mr Buttar has been compromised in securing alternative employment. He has only acquired a small amount of casual work. Despite his dismissal not being performance or conduct related, PFD did not provide a reference or statement of service to assist his search for new employment. PFD says he did not ask for either. 27 Mr Buttar retorts that his direct manager (Mr Harker) who was best placed to provide a reference was also made redundant and could no longer speak for PFD.28 I am satisfied that litigating his dismissal has compromised Mr Buttar’s capacity to confidently invite prospective employers to discuss his candidacy with his former employer, PFD. I accept his evidence that that during at least one job interview with a competitor, the prospective employer was sceptical of his claim that he had been made redundant by PFD given that PFD is regarded as a large, growing and successful business;

22.5. PFD is a significant employer with production and distribution operations in Adelaide beyond the Adelaide Fish Room. The evidence before me is that it continued to advertise vacancies and seek expressions of interest for work in Adelaide and South Australia within days of making Mr Buttar redundant 29;

22.6. An inordinate amount of time has not elapsed between Mr Buttar’s dismissal on 2 June and the date of this decision. In less than four months, proceedings have been heard, determined and orders made. The fact that the legislature contemplates reinstatement orders as a consequence of successful unfair dismissal litigation means that a period of absence between dismissal and a reinstatement order is not, in itself, a bar to such an order being made.

Conclusion

[23] These factors, together with my finding that it was PFD’s failure to take reasonable steps to redeploy Mr Buttar which materially contributed to the dismissal being harsh, unjust or unreasonable, lead me to conclude that reinstatement is not inappropriate. While strained relations with certain managers exist and may for some time, on the facts of this case I consider this a difficulty between individuals that will need to be managed rather than an irretrievable breakdown of the employment relationship as a whole. That difficulty does not outweigh the factors which weigh in favour of a finding that reinstatement is not inappropriate. I will therefore make a reinstatement order.

[24] Having regard to my finding that Mr Buttar’s role of Production Supervisor in the Adelaide Fish Room no longer exists in that form, it is not appropriate to make an order of reinstatement to his former position under section 391(1)(a) of the FW Act.

[25] I consider it appropriate to make an order that PFD reinstate Mr Buttar to another position as supervisor (or equivalent) in production or distribution consistent with his skills and capability on terms and conditions no less favourable than those on which he was employed immediately before his dismissal. I will order that this be a position in Adelaide to which he can attend without having to relocate his family interstate or in regional South Australia. Beyond that, I will not specify a particular position. I will allow the employer to ultimately determine the position consistent with this order 30. I will also provide sufficient latitude in my order to allow PFD and Mr Buttar to agree on a position other than the position I have ordered. In any event, PFD must comply with the order to provide terms and conditions that are no less favourable than those on which Mr Buttar was employed immediately prior to his dismissal.

[26] In making this order I recognise PFD’s submission that alternative positions across South Australia are governed by the PFD Food Services Pty Ltd (South Australia) Enterprise Agreement 2015 which has some different conditions to the Seafood Processing Award 2010 that governed Mr Buttar’s former employment. I do not consider this to be a barrier to a reinstatement order. Firstly, Mr Buttar came to be a salaried employee by decision of PFD and was paid well above the Seafood Award. Secondly, it is possible for an employee to be reinstated to a new position governed by a different industrial instrument. The statutory provision is that terms be “no less favourable”, not that they be the same. This can be satisfied if the position is an equivalent position or a close substitute 31.

[27] I recognise that in making this order the cost of re-employing Mr Buttar becomes a business expense, compromising in part PFD’s decision to save labour costs through what I have found to be a genuine business restructure of the Adelaide Fish Room. However, for the reasons set out in my primary decision and in this decision I consider this to be the result compelled by the weight of evidence and by the operation of the statute. Further, my order does not compel reinstatement into the Adelaide Fish Room. That is but one of the options available given that PFD’s production and distribution business is operated in Adelaide on multiple sites. The implementation of the Commission’s orders will require PFD to now reinstate Mr Buttar in circumstances where it was reasonable for him to have been redeployed. I also note that employment involves mutual obligation and mutual benefit. While Mr Buttar’s remuneration will be a cost to the business, the business will secure the value of his labour.

[28] I will provide PFD a reasonable time from the date of the order to implement its terms. I consider 21 days to be reasonable.

[29] I consider it appropriate to make an order under section 391(2) to maintain the continuity of Mr Buttar’s employment. I note this aspect of a reinstatement order is not opposed by PFD 32.

[30] I also consider it appropriate to make an order under section 391(3) of the FW Act that PFD pay Mr Buttar for remuneration lost or likely to have been lost because of his dismissal. However, I agree with PFD’s submission that a deduction should be made to the quantum of wages lost between the date of dismissal and the date of reinstatement according to the value of the payment made in lieu of notice ($5,833.31), the value of the severance payment made ($8,076.92) and the value of Mr Buttar’s earnings since dismissal ($1,500).

[31] Having found that reinstatement is not inappropriate, I do not need to deal with the compensation provisions of the FW Act.

[32] Mr Buttar’s application under section 394 of the FW Act is granted for the reasons set out in my decision of 24 August 2017 and in this decision. An Order giving effect to this decision is issued in conjunction with its publication. The parties have liberty to apply should assistance be required in its implementation.

DEPUTY PRESIDENT

Appearances:

Mr M. Buttar, on his own behalf.

Mr W. Cruse, for the Respondent.

Hearing details:

2017.

Adelaide.

15 and 22 August.

Final written submissions

September, 2017.

 1   [2017] FWC 4409 per Deputy President Anderson, 24 August 2017 (“Primary Decision”)

 2   Ibid at [81]

 3   Directions, 28 August 2017

 4   Applicant Submissions on Remedy, 8 and 19 September 2017; Respondent Submissions on Remedy, 11 and 19 September 2017

 5   Primary Decision at [56]

 6   Ibid at [36] - [45]

 7   Ibid at [46] – [53]

 8   Ibid at [76]

 9   Ibid at [64]

 10   Ibid at [4]

 11   Ibid at [14]

 12   Ibid at [76]

 13   Nguyen v Vietnamese Community in Australia trading as Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 at [9]

 14   Section 390(3)(a) FW Act

 15   Section 391(1)(a) FW Act

 16   Section 391(1)(b) FW Act

 17   Sections 391(2) and (3) FW Act

 18   Applicant Submissions on Remedy at 17 to 21

 19   Respondent Submissions on Remedy at 16

 20   Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186

 21   Ibid at [191]

 22   Nguyen v Vietnamese Community in Australia trading as Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 at [27]

 23   Respondent Submissions on Remedy at 18

 24   Ibid at 9 to 10

 25   Ibid at 11

 26   Regional Express Holdings Ltd trading as Rex Airlines [2010] FWAFB 8753 at [26]

 27   Respondent Submissions in Reply on Remedy at 3

 28   Applicant Submissions in Reply on Remedy at 3

 29   Exhibit A2 pages 14-22; Exhibit A3

 30   Technical and Further Education Commission trading as TAFE NSW v Pykett (2014) 240 IR 130 at [53] citing Anthony Smith & Associates Pty Ltd v Sinclair (1996) 67 IR 240

 31   IGA Distribution (Vic) Pty Ltd v Nguyen (2011) 212 IR 141

 32   Respondent Submissions on Remedy at 23

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