DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Paola Marafioti
v
Gonzalez Pty Ltd T/A Mac’s Crafts
(U2017/7263)

Application for an unfair dismissal remedy – dismissal not consistent with small business fair dismissal code - applicant unfairly dismissed - compensation ordered.

[1] Ms Paola Marafioti (the Applicant) was employed by Gonzalez Pty Ltd t/as Mac’s Crafts (the Respondent). Ms Marafioti commenced working for the Respondent on 6 March 2006 as the Sales Representative - Victorian Manager and was responsible for Victoria and Tasmania. She was required to sell products (textiles, fabrics and haberdashery) to the Respondent’s existing customer base and to develop new customers.

[2] The Applicant’s employment was terminated on 16 June 2017 as the Respondent could “no longer sustain the cost of having a paid representative in Victoria” 1 based on the Applicant’s sales figures.

[3] The Applicant has made an application for relief from unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (FW Act). The Respondent objects to the application on the grounds that the termination of employment was as a result of a genuine redundancy. Further, the Respondent says it is a small business and the dismissal is consistent with the Small Business Fair Dismissal Code (the Code).

Legislation

[4] Section 396 of the FW Act states:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[5] There is no dispute and I am satisfied that the application was made within time and the Applicant is protected from unfair dismissal (in that she has completed the minimum employment period and her employment is covered by a modern award).

[6] There is no dispute and I accept that the business is a small business as defined in the FW Act. At the time of the Applicant’s dismissal the Respondent employed 14 employees including the Applicant and one paid Director.

[7] If the dismissal is a genuine redundancy and/or it was consistent with the Code the Applicant could not have been unfairly dismissed (see s.385 of the FW Act).

Was the dismissal a genuine redundancy?

Applicant’s evidence

[8] Ms Marafioti says that over the 11 years she worked for the Respondent she developed a good working relationship with her customer base. She had a regular cycle of visits to customers. She accepts that there was a general decline in the industry and this was reflected in a decline in sales figures.

[9] Ms Marafioti gave evidence that over the period July 2016 to July 2017 sales declined. She says that a number of shops she was previously selling to were closing and that the Respondent had higher prices than its competitors.

[10] Ms Marafioti acknowledges that she received an email from Mr John Clegg, for the Respondent, on 27 April 2017 in which concern was raised about her drop in sales figures and the need to address this decline. The email invited Ms Marafioti to contact Mr Clegg to discuss what might be done to address the situation. Ms Marafioti replied by email later that evening and indicated that she thought that putting prices up had not helped but that to survive she thought the business had to diversify, that she needed “other products and not only fabrics” to sell. She also detailed a number of stores in Victoria she knew to be closing by the end of June, low sales on a recent trip and a general slowing down of business. She asked that Mr Clegg call her the following day to talk some more, indicated she was quite stressed and that she did not have “magic answers”.

[11] Ms Marafioti says Mr Clegg did not call her the following day to discuss the issues.

[12] Ms Marafioti says she recalls Mr Clegg called her in November 2016 about her disappointing sales figures and that in late February 2017 he spoke to her about the NSW sales representative coming to Victoria to assist her. Otherwise she does not recall Mr Clegg calling her in early February about the December and January sales figures. She agrees that Mr Clegg called her in March 2017 but says the discussion was about the products she should be selling and does not recall it being about her sales figures. She does not recall Mr Clegg calling her on 31 May 2017 to discuss her sales figures.

[13] Ms Marafioti says that on 15 June 2017 she received a phone call from Mr Clegg that went for about five minutes. Mr Clegg advised her at this time that her employment was being terminated because of low sales. He advised her that the Respondent was appointing a “commission-only” representative who would take over sales for the Respondent in Victoria.

[14] Ms Marafioti says that she should have been given the opportunity to consider taking on the role of a commission only representative but she was not.

[15] Ms Melissa Clegg is the sole Director and owner of the Respondent. She says that she had very limited contact with the Applicant and that contact with her was done through Mr Clegg or Mr Brian Ward, the Managing Director for the Respondent. While Mr Clegg is not employed by the Respondent Ms Clegg had delegated to him (along with Mr Ward) the responsibility for discussing sales related matters with the Applicant.

[16] Ms Clegg said that the Applicant’s sales figures for the financial year 2013/2014 were $577,512.61, for 2014/2015 they were $669,444.19, for 2015/2016 they totalled $705,497.12 and for 2016/2017 (ending 16 June 2017) were $470,347.94. 2 Further, Ms Clegg says the Applicant was paid $57,996 per annum and her expenses were paid for by the Respondent (including vehicle expenses, accommodation, travel, mobile phone account, fax and stationery). For the 2016/2017 financial year her expenses totalled $32,564.75.3

[17] Ms Clegg says that she had concerns about the sales figures in Victoria but that the reason for making Ms Marafioti redundant was the decision to appoint an agent to represent the Respondent in Victoria. She also says that the reason for making the Applicant redundant was a financial decision. Ms Clegg stated that the agent selected to undertake business for the Respondent in Victoria has seven to eight agencies that he represents. Ms Clegg says that the agent is “paid a flat commission of 10%” on all invoices.

[18] Ms Clegg says that the Applicant was not consulted about the decision to engage an agent to cover Victoria although she had been consulted about concerns with respect to her sales figures.

[19] Ms Clegg says that she is not aware if there was any contact with the Applicant by Mr Clegg between 27 April and 31 May 2017.

[20] Mr Clegg is the husband of Ms Clegg. He is the sole owner and Director of Craft Depot Pty Ltd. His evidence is that he and Ms Clegg determined together that the cost of a full-time sales representative in Victoria was no longer viable. For this reason they considered the engagement of an agent to sell the Respondent’s product into the Victorian market.

[21] Mr Clegg says that he spoke to the Applicant about the need to do “something” with respect to the situation in Victoria – including her sales figures – and that she responded that “you do whatever you have to do”. He says that the Applicant was aware that the business could no longer operate a paid sales representative on her sales figures. Mr Clegg says that the Applicant’s sales figures were not as a result of a lack of effort on her part.

[22] Mr Clegg agrees that he received an email from the Applicant on 27 April 2017 in which she responded to his request for ideas. He says that he understood that Mr Ward was going to speak to her but did not call her himself to discuss the content of the email.

[23] Mr Clegg says that the final decision to make the Applicant redundant was made by Ms Clegg. Mr Clegg however contacted the Applicant on 15 June 2017. This call was made without any prior notice as to the matter to be discussed. In the phone call Mr Clegg advised the Applicant of the decision to make her redundant and engage an agent. Whilst he does not recall how long the conversation went, Mr Clegg says that there was no discussion on the matter with the Applicant, rather he just advised her of the decision that had been made.

Submissions

[24] The Applicant submits that there was no consultation as required under the Storage Services and Wholesale Award 2010 4 (SSW Award) with her in respect of the redundancy. She submits that consultation requires a real opportunity to influence the decision. She further, submits that there was no consultation with respect to the decision to engage an agent to take over the work that she had previously performed.

[25] The Applicant submits that there is no evidence from the Respondent that can be relied upon to support a claim of changed operational circumstances such that a change was needed in the business that included redundancy.

[26] The Applicant also submits that, given that the reason for dismissal was redundancy, there can be no reliance placed on the Code.

[27] The Applicant says that in these circumstances the dismissal was harsh, unjust or unreasonable. Whilst the Respondent is a small business she says that this does not absolve it of responsibility for the deficiencies in the process it applied.

[28] The Applicant submits that I should conclude that she would have remained employed by the Respondent for an indefinite period of time. She says that, had consultation occurred and her proposal in her email of 27 April 2017 been considered, it may well have been that the business in Victoria could have changed course and grown.

[29] The Respondent submits that the decision to make the Applicant redundant was based on legitimate operational considerations. The comparison of the actual cost of a sales representative compared to the costs of an agent clearly demonstrates that the Respondent could no longer afford a sales representative in Victoria. In reaching this conclusion the Respondent emphasised that the poor sales figures were not a reflection on the Applicant, she was a good effective representative, but rather a reflection on a general downturn in the industry.

[30] The Respondent concedes that it was not aware of the relevant provisions in the SSW Award or the obligations placed on it with respect to consultation. Further, it agrees that a phone call to the Applicant where she was advised the Respondent had decided to engage an agent was not consultation.

[31] The Respondent submits that there is no evidence that, had it gone through the required consultation, the outcome would have been different.

[32] As to the question of whether the dismissal was harsh, unjust or unreasonable, the Respondent submits that the size of the business is a relevant consideration as to its failure to consult.

Genuine redundancy

[33] The Respondent says the dismissal of the Applicant was based on a genuine redundancy.

[34] “Genuine redundancy” is considered in s.389 of the FW Act. It states:

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.

[35] If it is that the Respondent did not comply with its obligations under the relevant award then the dismissal cannot have been a case of a genuine redundancy.

[36] The obligation to consult the Applicant with respect to the redundancy arises from the provisions of the SSW Award. Whilst I acknowledge the Respondent’s concession that it was not aware of its obligations under the SSW Award and that it did fail to consult with the Applicant I will consider, first, if I can be satisfied that it did or did not consult with the Applicant as required.

[37] Clause 9.1 of the Award states:

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.

[38] Clause 9.1(b) places a positive obligation on the employer, where it has made a definite decision to introduce change, to discuss such change in circumstances where it may have a significant effect. A significant effect includes termination of employment. The purpose of the discussion is not merely to advise the employees concerned of the decision but of the nature of the change, the expected effects of the change and what may be done to avert or mitigate any adverse effects.

[39] In Maswan v Escada Textilvertrieb T/A ESCADA 5 Vice President Watson found of a consultation provision in the same terms:

[19] These provisions are of long standing, emanating from the Termination, Change and Redundancy test case 6 in the early 1980s and from time to time have been reflected in legislation. The requirement to discuss proposed changes and consult about the changes has been held to require meaningful consultation and not merely an afterthought. Consultation after an irrevocable decision has been made has been held to not amount to meaningful consultation7.

[20] As Sachs LJ observed in Sinfield v London Transport Executive [1970] [at 558]:

“Consultations can be of very real value in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal. I start accordingly from the viewpoint that any right to be consulted is something that is indeed valuable and should be implemented by giving those who have the right an opportunity to be heard at the formative stage of proposals - before the mind of the executive becomes unduly fixed.” 8

[40] In the matter before me I am satisfied that there was no consultation with the Applicant. She was advised of the decision to make her position redundant and engage an agent and when she enquired as to whether she could take on the role of agent was told that it would not be fair to her. This does not amount to consultation but, in any event, it was a one way process. The decision had been made; the Applicant would be made redundant; no discussion was to be had. As Mr Clegg said in his evidence, the phone conversation of 15 June 2017 with the Applicant was to relay the decision to her; it was not to have a discussion with her about the decision. I would also observe that the Respondent did not provide anything to the Applicant in writing as is required under clause 9.1(b)(iii) of the SSW Award and, in this respect, failed to meet the consultation requirements.

[41] For these reasons I am satisfied that the Respondent failed to consult with the Applicant and, in this respect, failed to comply with its obligation under the SSW Award.

[42] The dismissal of the Applicant was therefore not a genuine redundancy.

Did the dismissal comply with the Code?

[43] The Code states:

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.

[44] The Applicant in this matter was not summarily dismissed. Further, there is no submission that the Applicant was dismissed for reasons associated with her conduct or capacity to do the job. Her capacity was not in question (nor was her conduct), a fact emphasised by the Respondent and its witnesses. In these circumstances it is difficult to see how the “other dismissal” provisions of the Code would apply.

[45] In any event it is apparent that the Code, insofar as it relates to “other” dismissals, requires a consideration of those matters that go to whether a dismissal was harsh, unjust or unreasonable under s.387 of the FW Act. The wording of the Code strongly suggests this (the need for a valid reason relating to conduct or capacity; the need for warnings to be given; the requirement that an employee be given an opportunity to respond to any reason and the need to consider that response; and the right of an employee to have a support person). Further, there is no indication in the code that the obligation on the Commission to properly consider all of the criteria and the standard of proof is in any way diminished because the employer is a small business.

[46] I shall therefore consider whether the dismissal was harsh, unjust or unreasonable.

Was the dismissal harsh, unjust or unreasonable?

[47] Section 387 of the FW Act states:

Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[48] In considering these matters I have had regard to the approach adopted by the Full Bench majority in UES (Int’l) Pty Ltd v Harvey 9 (Harvey).

Section 387(a) - a valid reason for the dismissal related to the person’s capacity or conduct

[49] I am satisfied that there was no valid reason for the dismissal of the Applicant related to her capacity or conduct. Whilst there may have been a valid reason in relation to operational reasons this is a matter to consider under s.387(h) below.

Section 387(b) & (c) - notification of that reason and an opportunity to respond

[50] It has been found that the notification and opportunity to respond relate to the valid reason for dismissal as specified in s.387(a). As there was no valid reason for the dismissal there can have been no notification or opportunity to respond.

[51] I consider this matter a neutral consideration. This, of course does not mean that the Applicant should not have been afforded procedural fairness and this is considered below.

Section 387(d) -support person

[52] The Applicant submits that the failure to notify her of the meeting in effect amounts to an unreasonable refusal by the Respondent to allow her to have a support person with her at the meeting that occurred (by telephone) on 15 June 2017.

[53] I am satisfied that this is a neutral consideration. The failure, however of the Respondent to advise the Applicant of the meeting and the purpose of that meeting and its impact on procedural fairness is considered below.

Section 387(e) - unsatisfactory performance

[54] The reason for dismissal did not relate to the performance of the Applicant. This is therefore not a relevant consideration.

Section 387(f) & (g) - the effect of the size of the business and the lack of access to dedicated human resources specialists on the procedures adopted

[55] I agree with the submission of the Applicant that the size of the business does not absolve the business of any responsibility in the method adopted in effecting the dismissal.

[56] I also acknowledge that it cannot be expected that a small business which does not have access to dedicated human resources staff or other specialist resources would have detailed and documented policies that provide guidance on how a matter such as this should be dealt with. However, it can be expected that any employer, regardless of its size, would recognise the need to treat its employees with respect and sympathetically in effecting a dismissal.

[57] The Respondent believed it had good reason to make the decision it did but it did not, for reasons best known to it, explain its rationale to the Applicant. When it did ask for her views on how to improve the business it did nothing with the feedback she provided.

[58] Whilst the expectations on how the dismissal might be effected might vary given the size of the business, expectations of common courtesy do not. The Respondent failed to show this to the Applicant. I do not suggest that it did so out of malice but perhaps out of a desire to, as much as possible, avoid the unpleasantness of the task.

Section 387(h) - other matters

[59] The Respondent said in an email to the Applicant that it wanted ideas from her on how sales could be improved in Victoria and then chose to ignore the suggestions the Applicant provided. The Applicant was well aware of the problems in Victoria. In response to the request of Mr Clegg the Applicant sent him an email on 27 April 2017 in which she put forward the view that the Respondent needed to “diversify” the business beyond fabrics. In addition however, the Applicant detailed difficulties she was having in gaining orders from established customers and the seven businesses she knew would close by the end of June compared to only one new opening.
[60] Further, the sales figures provided by the Respondent do show a decline in sales for the 2016/2017 financial year. Whilst sales per month appear to move around each year they do appear to show a steady decline in 2016/2017.

[61] I am satisfied, on these figures, that the Respondent had a legitimate reason to consider how it would continue its operations in Victoria. The Applicant knew things were not going well. She was stressed by the situation and conceded she did not have “magic answers”.

[62] It cannot be that a substantial business case is necessary to demonstrate “operational reasons” for a small business. The business owner did the maths and determined that the current arrangement of an employee in Victoria, with the attendant expenses, was no longer sustainable and that there was a reasonable alternative to still ensuring a presence in Victoria.

[63] I am satisfied that the business had a defensible reason for dismissing the Applicant in that they had concluded that they no longer required to have the job performed by the Applicant performed by anyone employed by the company. As was found in Harvey this can form a valid reason for the Applicant’s dismissal (it is just not a valid reason related to capacity or conduct). This is a relevant consideration in determining if the dismissal was harsh, unjust or unreasonable.

[64] The Respondent however did fail to consult with the Applicant as it was obligated to do by the provisions of the SSW Award.

[65] Despite the evidence of Mr Clegg that he spoke regularly to the Applicant about her sales performance (regardless of whether that evidence is accepted) when it came to the point of advising the Applicant that her employment was to be terminated no notice of the meeting or warning that the engagement of an agent was under consideration was thought a reasonable thing to do.

[66] The Respondent did deny the Applicant procedural fairness in the approach it took to the matters it was considering and, ultimately, the decision it reached. As I found above the Respondent sought the views of the Applicant in how things could be improved but showed no common courtesy in engaging in any further discussion with her about the matter. The Respondent at no time thought it reasonable to advise the Applicant that it was having difficulties in sustaining the position in Victoria and was considering moving to an agent for representation. Having denied the Applicant procedural fairness to this point the Respondent, quite dismissively, did not then have the courtesy to explain to the Applicant why it was terminating her position. As Mr Clegg said he called the Applicant to tell her what had been decided, not to have a discussion with her. In this regard (and others) the Respondent showed scant regard to the 11 years of apparently faultless service of the Applicant.

[67] The Applicant did express some interest in taking on the agency role for the Respondent in Victoria and expressed this interest to Mr Clegg but her interest was pushed aside, presumably because the Respondent had already entered into an agency arrangement by the time it advised the Applicant of its decision.

[68] The Applicant has been actively seeking work since her dismissal without success. She is 58 years old and has been involved in selling fabrics and the like for 28 years, the last 11 years with the Respondent.

Conclusion as to harsh, unjust or unreasonable

[69] In Harvey the majority found that a “failure to consult does not necessarily mean a dismissal was harsh, unjust or unreasonable.” 10

[70] In this case (as was found in Harvey) I am satisfied that the failure to consult renders the dismissal unreasonable. The Respondent sought out the Applicant’s thoughts and ideas on how to improve sales in Victoria but then did nothing with these when they were put forward. The Respondent clearly was considering shifting to an agent in Victoria but chose not to discuss this and its implications with the Applicant. Had the Respondent consulted with the Applicant it may well have been that a reasonable and acceptable outcome could have been achieved.

[71] I am also satisfied that the dismissal of the Applicant is harsh given its economic consequences for her. Again, consultation with the Applicant might well have mitigated these consequences.

[72] I am therefore satisfied that the dismissal was harsh, and unreasonable. I am also satisfied that the Applicant was dismissed and is protected from unfair dismissal, that the dismissal was not compliant with the Code and it was not a case of genuine redundancy.

[73] For these reasons I am satisfied that the Applicant was unfairly dismissed.

Remedy

[74] The Applicant does not seek reinstatement and I am satisfied that, in such circumstances, reinstatement is not appropriate.

[75] I shall therefore consider compensation.

[76] In determining the amount of compensation s.392 of the FW Act states:

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

[77] The Applicant says that, had her employment not been terminated, I should conclude that she would have remained employed by the Respondent for an indefinite period.

[78] I am not convinced of this. As I have found above, the Respondent had reasonable grounds on which to review its need for a sales representative in Victoria. Whilst the Applicant may not concede any downturn in business, there is an evident downward trend in her 2016/17 sales figures. Further, the Applicant herself concedes that stores were closing (with only one new opening) or purchasing little.

[79] Further, it is open to the Respondent to consider how best to operate its business in what everyone appears to agree was becoming a difficult environment with shop closures and slowing sales. Whilst the Applicant put some proposals to the Respondent about pricing and diversification ultimately it is the Respondent’s decision as to what products it wishes to sell and at what price.

[80] I do accept however that, for the Respondent to properly consult and consider the views of the Applicant it would have resulted in her remaining in employment for a further four weeks. I am not convinced that the business would have taken a different course as suggested by the Applicant following such consultation. The Respondent had looked at the costs of maintaining an employee in Victoria and weighed this against the cost of an agent. From a financial perspective I am satisfied that, in all likelihood, it would have proceeded to engage an agent to undertake the work.

[81] The Applicant’s remuneration at the time of her dismissal was $1,115.30 per week in wages.. She also received $475.23 per week in other benefits (based on 2016/17 expenses) including a car, fuel and phone (but not including accommodation, travel or stationery/postage costs which were reimbursed expenses). The Applicant was also entitled to 1% commission on sales. Taking into account her sales for all of 2016/17 (up to 16 June 2017 = 50 weeks) of $470,347.94 the Applicant would have received commission equivalent to $90.45 per week.

[82] I am therefore satisfied that, if the Applicant had not been dismissed the remuneration she would have been likely to receive would have been $6,723.92 plus 9.5% superannuation.

[83] There is no basis on which to reduce this amount for contingencies. Further, I am satisfied that the Applicant has made attempts to mitigate her loss such that there should be no deduction for this reason.

[84] I am satisfied that there are no other relevant matters to consider.

[85] This amount does not need to be reduced for misconduct as there was none. I have not included any amount for shock or distress and the amount I intend to award does not breach the compensation cap.

[86] I have therefore determined that the Applicant should be awarded an amount of $6,723.92 plus 9.5% superannuation to be paid into the Applicant’s superannuation account in compensation. The amount is to be paid within 21 days of the date of the making of the order. An order 11 to this effect will be issued with this decision.

COMMISSIONER

Appearances:

P. Tatti for the Applicant.

R. King for the Respondent.

Hearing details:

2017.

Melbourne:

September 28.

 1   Applicant’s Outline of Arguments: merits

 2   Exhibit R2 and Exhibit R1 - list of sales document.

 3   Exhibit R2.

 4   MA000084.

 5   [2011] FWA 4239.

 6   Termination, Change and Redundancy case (1984) 8 IR 34; (1984) 9 IR 115.

 7   Construction. Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company Ltd (1998) 88 IR 202.

 8   Sinfield v London Transport Executive [1970] 1 CH 550.

 9   [2012] FWAFB 5241, per Acton SDP and Bissett C.

 10   Ibid at para [49].

 11   PR597150.

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