| [2020] FWC 2027 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Nicky Birkill
v
Pea in a Pod Pty Ltd
(U2019/10623)
COMMISSIONER BISSETT |
MELBOURNE, 28 APRIL 2020 |
Application for an unfair dismissal remedy.
[1] Ms Nicky Birkill (Applicant) was employed by Pea in a Pod (Respondent). She commenced employment on 24 July 2007 and was employed as the General Manager/Marketing Manager by the Respondent. Her employment was terminated on 30 August 2019. She has now made an application for relief from unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (FW Act).
[2] The Respondent says that the dismissal of the Applicant was a genuine redundancy and that, in those circumstances, the application should be dismissed.
[3] The Respondent is a small business. Its owner is Mrs Jennifer Birkill – the Applicant’s mother. The Respondent had three employees at the time of filing its submissions – Mrs Jenny Birkill, a relationship manager who works part-time and a casual retail and warehouse assistant. 1 The Respondent also uses the services of a number of contractors for book-keeping and payroll, a marketing consultant, a creative and operations manager and a pattern maker and assistant fashion designer.2
[4] Much of the background of the matter before me is not in contention. It is briefly as follows.
[5] In or around October 2015 there were discussion involving the Applicant and her mother in relation to ownership of the Respondent business. Mr Noel Gibson, an accountant and apparent advisor to the Respondent, advised the Applicant that he had had a discussion with Mrs Jennie Birkill and confirmed that, once Grey Street (a property owned by Mrs Birkill) was sold the bank debt and security over the Respondent business would be extinguished and at that time the Applicant would be appointed Director of the Respondent and issued with 50% of the shares in the Respondent business, Mrs Birkill would update her will to bequeath the remining 50% shareholding to the Applicant and a heads of Agreement would be drawn up with a succession plan for the remaining 50% of the Respondent held by Mrs Birkill “over time” 3 (the October proposal).
[6] In February 2016 the Applicant wrote to Mrs Birkill and sought further information in relation to the October proposal. In that letter the Applicant acknowledged that Grey Street had not yet been sold. She also sought to have discussions with Mrs Birkill with respect to her workload and indicated she could no longer work overtime if she was not paid for doing so.
[7] On 20 June 2018 the Applicant was admitted to Malvern Private Hospital. A subsequent workers’ compensation claim was accepted and the Applicant received weekly compensation payments until 29 July 2019. The Applicant did not return to work after 20 June 2018.
[8] As part of the investigation into the Applicant’s claim for workers compensation Mrs Birkill made a statement to the investigator. 4 In that statement Mrs Jenny Birkill said that:
• The Applicant had a history of panic and anxiety attacks;
• Prior to her going off work it was not intended to demote or retrench the Applicant;
• She believed that the Applicant’s mental health issues [the basis of the workers compensation claim] were due to stress at the Respondent and that no other person or organisation contributed to the injuries. 5
[9] On 8 August 2019 the Applicant telephoned Mrs Birkill to discuss the Applicant’s return to work. Mrs Birkill did not respond to the call.
[10] On 10 August 2019 the Applicant emailed Mrs Birkill and advised that her most recent Independent Medical Examination assessment (although not provided to the Commission) indicated she could work 12 hours per week spread across 3 days. She asked for an indication of the duties she should undertake and stated that she would be working from home. 6 The Applicant followed this up with another email on 12 August 2019.7
[11] On 12 August 2019 the Applicant also sent a text message to Mrs Birkill in which she said:
Please arrange 12 hours of work per week for me starting this week. Preferably off site so I don’t have to see you. Thanks.
If that’s too much you’ll have to fire me.
I am sure you have had lengthy chats with Brett 8 about all of this too. Thanks for choosing money over your daughter. You won’t see me again.9
[12] On 16 August 2019 the Applicant sent a further text message to Mrs Birkill in which she said:
I’ve emailed you a few times requesting 9-12 hours of work per week. Are you able to respond? There is lots I can do from home: website Copywriting, google analytics reporting, research etc. Is this still available to me? Or have you made me redundant? Either way I need an answer as soon as possible. Thank you 10
[13] On 25 August 2019 the Applicant and Mrs Birkill met in a park in East Melbourne. The Applicant’s evidence is that the discussion was primarily about sorting out the share issue outlined in the October proposal. 11
[14] At 1.50pm on 25 August 2019 the Applicant sent a further text message to the Mrs Birkill which said “Shame on you mum. Shame on you” and a further text at 6.53pm which read:
You may as well cancel my health insurance because I won’t be able to complete my therapy now. All I wanted was to get well. You should be ashamed of yourself.
[15] The following day on 26 August 2019 the Applicant again emailed Mrs Birkill indicating she had yet to receive any reply as to the status of her employment and again advising she could work “3-4 hours per day for 2-3 days”. 12
[16] On 8 August 2019 Mr Gibson sent an email to Mrs Birkill, apparently following a discussion with her, which read:
Jenny,
Two issues:
1. Employment
a. As Nicky hasn’t fulfilled her employment duties, that is, non attendance to PAP you are terminating her employment effective immediately.
b. Pay out her unused Annual Leave/Long Service Leave is she has any
c. Request the return of the car
2. Succession Plan
a. We had a couple of discussions about the future operations of PIAP and a potential opportunity for Nicky to step up to assist in the success of PIAP
b. We discussed the possibility of a succession plan whereby you would sell down your equity progressively to coincide with your future retirement.
• No formal documents of guarantees were ever made.
• Nicky didn’t perform as an employee
• She has had substantial absences from PIAP
So, I would terminate her employment. Leave the car with her if it is going to create problems with David & yourself. (It’s just a car) … 13
[17] On 28 August 2019 Mrs Birkill emailed Sarah Singleton 14 in which she said:
It is with great sadness that things have come to this with [the Applicant] but I need to make this unforeseen professional break with her in order to try and salvage our family life.
Please find attached [the Applicant’s] draft letter for redundancy that I need you to complete certain figures in order to send it to her.
Can you please fill in the highlighted areas and send it back to me?... 15
[18] Ms Singleton responded the next morning and said she could complete the information that evening. Mrs Birkill responded, in part, that “It is an awful situation for me as I love Nick…” 16
[19] On 30 August 2019 Mrs Birkill sent a text message to the Applicant in which she said:
Dear Nicky I have not responded to your text messages as I have had to have time to think I have now come to the conclusion that we must separate work from family so I am sending you a termination letter today I have and will never stop loving you and hope we can repair our relationship in the future the door will never close I know you are more than capable of great success in your life love always and forever love mum 17
[20] A letter of termination of employment was emailed to the Applicant on 30 August 2019 which said that the Applicant’s employment was terminated by reason of redundancy.
Mrs Jennifer Birkill
[21] Mrs Birkill gave evidence that the reason she terminated the Applicant’s employment was because she no longer wished to have anyone perform the role of the Applicant. She said that, with the Applicant taking extended time away in 2018/2019 she was able to consider the structure of the business and determined that the Applicant’s role in its form was surplus to the requirements of the business.
[22] Mrs Birkill further said that the Applicant’s performance “had not been good for years” and that if she had not made the Applicant redundant she “would most likely continue” in the role “regardless of performance or conduct issues, because she was my daughter.”
[23] Mrs Birkill also said that she “had an epiphany that [she] did not have to continue with a surplus and overblown small business “General Manager/Marketing Manager” role simply because it was occupied by a close relative.”
[24] Mrs Birkill gave evidence that, following the Applicant’s absence in June 2018, she re-assigned her work functions to other employees and contractors. As a result she said that she now has all areas of the team “including design/production and sales and marketing” as part of the decision making processes.
[25] Mrs Birkill produced a position description for the General Manager/Marketing Manager position on which she indicated who had taken over the functions previously carried out by the Applicant. 18 That document shows that the work Mrs Birkill said had been done by the Applicant now being done by Nicole, Bridget and Georgia.
[26] Mrs Birkill gave evidence that Georgia Grigg was engaged as a contractor marketing consultant. 19 Mrs Birkill further gave evidence that Bridget Radomski directed the work of Ms Grigg20 and that Ms Grigg did social media and weekly emails. Whilst Mrs Birkill agreed that Ms Grigg did some of the work previously performed by the Applicant she rejected the proposition put to her that Ms Grigg was engaged to “perform…the principal component of the role formally performed” by the Applicant.21
[27] Mrs Birkill gave evidence that “Bridget…took over the major marketing of the company…Ms Grigg only comes in to – she’s only at the moment now only working one day a week, she does emails and social media. That is all she does.” 22
[28] Mrs Birkill agreed in cross examination that she had provided contradictory statements in relation to the stress the Applicant may have been suffering at work. Mrs Birkill provided the following evidence to the Commission:
Nicky says in her statement that she was suffering from stress during 2014 to 2016. I understood that she was suffering mental health issues. I understood that the issues mainly stemmed from substance abuse. Work was not particularly stressful as wholesale brick and mortar stores were closing therefore, we had less work demands. We went from 150 wholesale accounts, down to approximately 30. No one else has had issues with workplace stress. I tried my utmost to be supportive. Nicky saw counsellors and doctors throughout this time - I think that was at least weekly. She was allowed all the time she needed to attend such appointments and was fully paid during this time away from work. I tolerated behaviour from her to myself and other staff that with hindsight was unacceptable. I tolerated haphazard attendance to work and performance of work. It was an awful time for me as Nicky’s employer and mother - wanting her to be feeling better and therefore performing better… 23 [underlining added]
[29] In her statement to Workcover of October 2018 she said:
I do not believe that any other company, organisation or individual person contributed to the alleged subject injuries. I do believe the workload increased dramatically at Pea in a Pod Pty Ltd which contributed to Nicole’s alleged subject injuries, I will say in a small business if we have a deadline to meet, then all staff have to push in and contribute. I do not have any company policies and procedures to provide. 24
[30] Of the apparent contradictory nature of the two statements Mrs Birkill said:
Well, I’ve lied in one of them, haven’t I? May I finish answering your question? I will sit here and I will say as a mother, what was I to do? I’ve tried to help my daughter on one hand; I’ve tried to keep running a business on a second hand, and bigger fool me. 25
[31] Mrs Birkill gave evidence that she was aware that the Applicant’s Workcover payments had stopped and that the Applicant was fit to return to work in prior to 8 August 2019. At this time she agreed that she contacted Mr Gibson:
When you received news, either from Nicky personally, or from the WorkCover insurer, or from both of them, that Nicky was in a position to return to work on a graduated return to work program, you were very concerned, weren’t you? -I was concerned as I had received text messages that, “I want to return to work, but I don’t want to see you. I want to work off site.” So I was concerned about that, yes. Greatly concerned.
So the answer to my question is yes? -Yes.
And because of your concern, you contacted Mr Gibson to seek his advice. Is that correct? -Well, it must be, yes.
And you contacted Mr Gibson to seek his advice in relation to how you could terminate my client’s employment, didn’t you? -Yes.
And in his written advice to you on 8 August Mr Gibson provided to you his advice as to the steps that you could take to terminate my client’s employment, didn’t he? -He has told me the steps, yes. 26
[32] Mrs Birkill however said she did not act on the advice of Mr Gibson but rather obtained expert HR advice. When asked if she had decided to make the Applicant redundant following receipt of legal advice Mrs Birkill said:
No, I did not. The position was redundant. It wasn’t workable 12 hours a week for what she wanted to come back. And I will say again, to get a text message, “I want to work off site so I don’t have to see you”, was a no-win. How could someone work 12 hours a week and not see me? 27
[33] Mrs Birkill said she did not respond to the texts from the Applicant as she “had to have time to think about it”. 28
Ms Bridget Radomski
[34] Ms Radomski gave evidence that she was engaged as a contractor by the Respondent in the role of “Creative Director and Operations”. She has worked for the Respondent since March 2018 and works 24 hours per week. The duties she performs are set out in her witness statement. 29 Her evidence is that since the Applicant’s absence from work in June 2018 she had taken on responsibility for setting up office systems and procedures and identifying best practice to achieve more efficient and effective systems and procedures that had previously been part of the role of the Applicant. Further, in conjunction with her colleague Georgia Grigg, she has taken on responsibility for a range of marketing strategies and initiatives.
Ms Nicole Ferguson
[35] Ms Ferguson gave evidence that she is employed on permanent part-time basis with the Respondent as Relationship Manager (Retail, Wholesale and Online). She said that since the Applicant’s absence she has taken on the tasks of handling all inquiries and complaints via phone, email and general correspondence, ensuring customer serviced standards are maintained and, along with her colleague Georgia Grigg, monitoring outgoing communications.
[36] Ms Ferguson also gave evidence that other tasks that had previously been performed by the Applicant were now being performed by Georgia Grigg and Andrew Lee, both of whom commenced after the Applicant went on leave.
Ms Nicole Birkill
[37] The Applicant gave evidence that she had never seen the position description relied on by Mrs Birkill although agreed that it detailed “some of” the work she performed. 30 She said that in 2010, following some time off work she and Mrs Birkill decided they needed to change the direction of the business. Her evidence is that she became proficient in client management and graphic design software.
[38] The Applicant said that in 2012 or 2013 Mrs Birkill indicated, in the context of what should be put on business cards, that she was the “General Manager”.
[39] The Applicant said that in 2012, in addition to undertaking bookkeeping, preparing fashion catalogues and working closely with sales agents and assisting designers she took on responsibility for managing new areas of the business, producing fashion catalogues including touching up and indexing photographs, uploading images to the website and writing copywrite descriptions, handling inventory on accounts and e-platforms, performing graphic design, reviewing and checking all goods entering the warehouse, responding to customer enquiries and resolving disputes, devising a marketing calendar, managing staff, providing marketing material and assisting Mrs Birkill “with an abundance of miscellaneous tasks.”
[40] Over time in addition to the tasks specified, her role evolved to include other online business skills.
[41] The Applicant said that by 2018 her role remained the same but the workload increased. She went on sick leave in June 2018 and submitted a WorkCover claim in October 2018. This was accepted in May 2019.
[42] The Applicant said that in June 2019 she was assessed by an Independent Medical Examination as having the capacity to return to work for 12 hours a week spread across three days. She said that on and from 10 August 2019 she emailed Mrs Birkill a number of times about her return to work. She did not receive a response to those emails. On 30 August 2019 she received a text message from Mrs Birkill advising her that Mrs Birkill was sending a termination letter that day.
[43] The Applicant gave evidence that whilst she was off work after June 2018, after observing a dramatic fall in visits to the Pea in a Pod site, she proposed to Mrs Birkill that she engage Georgia Grigg to manage the on-line business. Ms Griggs did commence working for Pea in a Pod thereafter.
[44] The Applicant agreed that the work outlined in paragraphs 13 and 14 of the statement of Ms Radomski is work that she, the Applicant, performed.
[45] The Applicant maintained that the list of tasks outlined in the position description attached to Mrs Birkill’s statement, whilst listing the tasks the Applicant performed, was an incomplete list of her work. 31 She did, however, agree that all of the tasks on that list were being performed by other people at the time she sought to return to work.32
[46] The Applicant agreed that over the period December 2018 – March 2019 she made a number of demands of Mrs Birkill in relation to the October proposal including that the October proposal be implemented or that the Applicant be paid a year and a half’s salary to settle the matter. None of these demands brought about a resolution of the October proposal. The Applicant said that she met with Mrs Birkill in July 2019 to discuss how they could move forward. Nothing came of this.
[47] The Applicant gave evidence that her proposal to her mother that on her return to work she do “website Copywriting, google analytics reporting, research” 33 during her 12 hours of work per week were her suggestions as to the type of work she could do. Further, she agreed that, at the time she was seeking to return to work, her relationship with her mother was such that it “probably wasn’t appropriate for either of us to be working together”34 which is why she suggested working offsite.
[48] The Applicant said that when she asked Mrs Birkill in one of the text messages “or have you made me redundant” she used the word “redundant” to ask if she was being terminated and that was all she meant.
[49] The Applicant gave evidence that she was aware that after 52 weeks on WorkCover her employer was not required to offer her a return to work plan but was not sure if she had been away for that period of time 35 but agreed that she had been absent in excess of 52 weeks.36
Assessment of witnesses
[50] I accept the evidence of Ms Radomski and Ms Ferguson. Both were straight forward in the limited evidence they gave.
[51] An assessment of the evidence of Mrs Birkill and the Applicant is more difficult. The mother-daughter relationship has clearly infected the employer-employee relationship. For this reason much of the evidence of Mrs Birkill was based on her emotional responses to her personal relationship with her daughter as opposed to an objective view of the circumstances by which the employment relationship had come to an end. Likewise the Applicant, in her evidence, recognised the almost toxic relationship with her mother and conceded they could not work together.
[52] The Applicant suggested that, given Mrs Birkill’s concession that she had lied either in her statement to the Commission or her statement to WorkCover cast such doubt over the credibility of Mrs Birkill’s evidence such that I should “treat her evidence with great caution and accord it little weight”.
[53] Whilst I have treated Mrs Birkill’s evidence with caution it is not because of the contrast in evidence given to WorkCover and the Commission. Mrs Birkill’s statement to the Commission related to the period 2014-2016. Her statement to Workcover was in relation to an injury in 2018. It is not obvious to the Commission that her opposing statements referred to the same period of time.
[54] I have, however, treated Mrs Birkill’s evidence with some caution because it is founded on a highly emotional response to the personal circumstances of her family just as many of her actions were. This is clearly apparent from the email sent to Sarah Singleton, the text message of 30 August 2019 to the Applicant and her evidence to the Commission.
[55] This is not to say that I consider Mrs Birkill has set out to deliberately mislead the Commission but her emotional relationship with her daughter does not provide a sound basis for making factual findings in relation to the termination of employment of her employee.
[56] I have also treated the evidence of the Applicant with caution. I consider that the Applicant has sought to overstate her responsibilities within the business as evidenced by her highly inflated assessment of the tasks she performed and her downplay of the role others played in the company. I accept that the Applicant had not seen the position description produced by Mrs Birkill in these proceedings. I also accept that she may have undertaken more tasks than indicated in that description but it is difficult to align her claims as to the tasks she did with those tasks allocated to other staff upon her departure. If it was that so much of the work she did is no longer being done it is either surprising the business continues to operate or those tasks (as part of her job) were, in fact no longer required to be performed suggesting her position was redundant. 37
[57] Further, I consider that the Applicant’s evidence was strongly influenced by her desire to see the October proposal given some force either by implementation of its terms or through some other settlement.
[58] I should add that I have not relied on a newspaper report from 2014 in relation to the business. Its relevance to the determination of whether the dismissal of the Applicant in August 2019 was a genuine redundancy or was unfair is not apparent.
[59] Section 396 of the FW Act sets out those matters that must be considered and determined prior to considering the merits of an application or relief from unfair dismissal:
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.
[60] I am satisfied (and it is not disputed) that the application was made within time. I am also satisfied that the Applicant is protected from unfair dismissal.
[61] The Respondent submits that the dismissal was a case of genuine redundancy. The Applicant disputes this.
[62] The matter for me to decide, in the first instance, is if the dismissal was a case of genuine redundancy.
[63] Section 389 of the FW Act deals with genuine redundancy. It states:
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
[64] The parties agree that there is no award or enterprise agreement that applied to the Applicant’s employment. For this reason the consideration is if the Respondent no longer required the Applicant’s job to be performed by anyone because of changes in the operational requirements of the business. If this is found to be so, issues of redeployment then need to be considered. However, if that is not correct, the dismissal could not have been a genuine redundancy and issues of redeployment do not need to be considered.
[65] In Ulan Coal Mines Limited v Howarth and others 38 the Full Bench of the Commission considered the operation s.389(1)(a) of the FW Act. They said:
[15] These were the circumstances in which it was necessary to consider the meaning and application of the relevant statutory provisions and, in particular, the expression “the person’s employer no longer required the person’s job to be performed by anyone” in s.389(1)(a) of the Act. These words have long been used and applied in industrial tribunals and courts as a practical definition of redundancy (see e.g. R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Cooperative Limited (1977) 16 SASR 6; Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115; Short v F.W. Hercus Pty Limited (1993) 40 FCR 511). They have also been adopted in the National Employment Standards provided under the Act in dealing with entitlements to redundancy payments (see s.119).
[16] The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will be a case of genuine redundancy:
“1547 Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548 The following are possible examples of a change in the operational requirements of an enterprise:
• a machine is now available to do the job performed by the employee;
• the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.”
[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
[18] In Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” (at par [27])
[66] In short, that tasks attributable to the redundant employee continue to be performed does not mean that the redundancy is not genuine. However, the reverse is not automatically true. Just because the tasks may have been reallocated does not mean the redundancy is genuine. The critical issue to consider is the reason for the redundancy. If the reason is because of the changed operational requirements of the business the redundancy will be genuine. But if it there is some other motive for the redundancy it will not be genuine.
[67] In Nettlefold v Kym Smoker Pty Ltd 39 Lee J of the Industrial Curt of Australia said of “operational requirements”:
The Act does not define the term “operational requirements”. Obviously it is a broad term that permits consideration of many matters including past and present performance of the undertaking, the state of the market in which it operates, steps that may be taken to improve the efficiency of the undertaking by installing new processes, equipment or skills, or by arranging for labour to be used more productively, and the application of good management to the undertaking. In general terms it may be said that a termination of employment will be shown to be based on the operational requirements of an undertaking if the action of the employer is necessary to advance the undertaking and is consistent with management of the undertaking that meets the employer’s obligations to employees.
[68] There is, in this case, a need to determine the reason for the redundancy and if it is attributable to changed “operational requirements” of the business.
[69] I accept that when the Applicant went on extended leave from June 2018 the work that she had performed was distributed amongst other staff of, and contractors to, the business. I also accept the evidence of Mrs Birkill that the absence of the Applicant did give her pause to consider how best to manage the business. However, I am not convinced, on the evidence before me, that this is what motivated the redundancy of the Applicant.
[70] I consider it reasonable to infer, and I am satisfied, that what motivated Mrs Birkill to go down the path of redundancy of the Applicant was a desire to separate her family life from her business life and a desire to get her family life back in order. Mrs Birkill said as much in her email to Ms Singleton on 28 August 2018 (two days before terminating the Applicant’s employment) where she said that she needed to make the break (the redundancy) “to try and salvage [her] family.” 40 She did not tell Ms Singleton that the operational requirements of the business had changed. This communication to Ms Singleton is the most contemporaneous communication with respect to the evidence before me with the decision to make the Applicant redundant and, for this reason, must be accorded some weight. In addition there is nothing put by the Respondent or said by Mrs Birkill that suggests that operational requirements of the business had changed.
[71] It is apparent that Mrs Birkill took no steps to resolve the on-going employment of the Applicant until the Applicant sought to return to work (although not to the workplace).
[72] It is apparent from the tone of the text messages and emails from the Applicant to Mrs Birkill in August 2019 and the Applicant’s demands through December 2018 to March 2019 and discussions in July 2019 in relation to the October proposal that a return to a working relationship between the two was going to be difficult. The Applicant wanted the October proposal resolved. Both the employment and the personal relationships were fraught, certainly by its non-resolution.
[73] I accept that at this time Mrs Birkill sought advice from Mr Gibson on 10 August 2019. It is not apparent from his advice that the issue raised by Mrs Birkill with him was that the Applicant was due to return to work but there was no work for her to do. That advice has no hint that redundancy is a possibility. This further tells against a finding that operational requirements of the business had changed. I accept that she did not act on this advice but on further separate advice to make the Applicant redundant. I should say of the legal advice apparently obtained by Mrs Birkill I draw no adverse inferences from her decision not to disclose that advice. It is privileged and nothing can be taken from its non-release to the Commission.
[74] For these reasons I am not satisfied that the motivation in making the Applicant redundant was changed operational requirements of the Respondent but rather that Mrs Birkill did not want her daughter to return to the workplace given the breakdown in both their personal and working relationship.
[75] I am therefore not satisfied, on the basis of the evidence before me, that the dismissal was a genuine redundancy. The jurisdictional objection of genuine redundancy is therefore dismissed.
[76] Having found that the dismissal was not a genuine redundancy s.396(c) of the FW Act requires that I determine if the dismissal was consistent with the Small Business Fair Dismissal Code (the Code) in circumstances where there is no dispute that the Respondent is a small business. If the dismissal was consistent with the Code then the Commission will not have jurisdiction to deal with the unfair dismissal application.
[77] The Code states:
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.
[78] The Respondent submits that it is covered by the Code and that the dismissal of the Applicant was consistent with the Code. The Respondent says that:
• the relationship between the Applicant and Mrs Birkill had broken down;
• the Applicant agreed in her submissions that Mrs Birkill was harassed and threatened by her;
• Mrs Birkill gave evidence that she and the Applicant’s father were at breaking point emotionally;
• The Applicant’s behaviour caused an imminent risk to Mrs Birkill and her husband.
[79] The Respondent submits that Mrs Birkill held a belief on reasonable grounds that the Applicant’s behaviour created health and safety issues.
[80] The Applicant submits that the dismissal of the Applicant was not a summary dismissal so the first part of the Code does not apply.
[81] Further, the Applicant submits that the Respondent did not warn the Applicant at any time that her employment might be at risk and that the only reason ever given to the Applicant for dismissal was redundancy. Further, the Applicant says that Mrs Birkill gave evidence that she should have told the Applicant at some point in time that she was not happy with the Applicant but did not.
[82] The Applicant submits that at no stage was it put to the Applicant that there were issues with her conduct or capacity and was not given any warning such that the Code was not complied with. For this reason the Applicant says I should dismiss any claim that the Code was complied with.
Consideration of the Code
[83] The Applicant in this case was not summarily dismissed. She was dismissed for reasons of redundancy. For this reason I am not convinced that the summary dismissal provisions of the Code apply.
[84] If I am wrong however and the summary dismissal provisions do apply there is no evidence before me that the reason for the dismissal was that Mr Birkill had a basis to believe that there was some breach of health and safety. While I accept that Mrs Birkill was concerned at the impact her relationship with the Applicant was having on her family life, this is not enough to found a belief on “reasonable grounds” of a breach of health and safety procedures or to any of the matters included in the serious misconduct section of the Code.
[85] Further, the reason for dismissal was not capacity or conduct and the Applicant was never warned of capacity or conduct issues. It therefore cannot be found that the dismissal complied with the “other dismissal” provisions of the Code.
[86] For these reasons I am satisfied that the dismissal was not consistent with the Code.
[87] Having dealt with those issues that must be considered prior to the merits of the case it is necessary to determine if the dismissal was unfair.
[88] Section 385 of the FW Act sets out those circumstances in which a dismissal will be found to be unfair. It states:
What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
[89] I am satisfied that the Applicant was dismissed. I am satisfied, for the reasons given above that the dismissal was not a genuine redundancy and that the Code was not complied with. It is therefore necessary for to determine if the dismissal was harsh, unjust or unreasonable.
[90] Section 387 of the FW Act sets out those criteria the Commission must take into account in determining if a dismissal was harsh, unjust or unreasonable. Section 387 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.
[91] I have considered each of these matters.
(a) 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)
[92] I am not satisfied that there is a valid reason for the dismissal of the Applicant related to her capacity or conduct. Whilst vague references were made to performance issues or to the Respondent not being happy with the Applicant over time, there is no evidence of any actual conduct or performance issues that warrant dismissal such that I could find such conduct occurred or that performance issues (generally put) were such that they provided a valid reason for dismissal. General assertions of some past performance matters are not enough to find a valid reason for dismissal.
[93] That Mrs Birkill did not raise issues with the Applicant because she was her daughter does not provide me with licence to find that those matters not put to the Applicant, and not articulated before me, somehow provide a valid reason for dismissal.
[94] The Applicant clearly was unwell in the period leading up to June 2018 when she proceeded on leave and then on to WorkCover payments. She attempted to return to work some 14 months later. At that time the only work related interaction the Applicant had with Mrs Birkill was to seek to return to work (which never occurred) and to seek to have resolved the October proposal – a matter that was a personal relationship issue and could not form a valid reason for dismissal.
[95] As to the effects on the health and safety of others, it must be the capacity or conduct of the dismissed employee that has this effect. Whilst this may have been anticipated if the Applicant had returned to work, there is no evidence of performance or conduct that did have such an effect such that it could provide a valid reason for dismissal.
[96] For these reasons I am not satisfied that there was a valid reason for dismissal related to the Applicant’s capacity or conduct.
(b) & (c) whether the person was notified of that reason and whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
[97] Whether the employee was advised of “that” reason is a reference to the valid reason for dismissal. As there was no valid reason for dismissal the Applicant was not advised of that reason and not given an opportunity to respond prior to the decision to dismiss her being made. In any event the only reason for dismissal given to the Applicant was redundancy. If there were other grounds these were not put to the Applicant and she was not given an opportunity to respond to these. There is no evidence of procedural fairness in any aspect to the termination of employment.
(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
[98] There is no evidence of any meetings with the Applicant in relation to her dismissal. She was therefore not denied reasonable access to a support person.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[99] There is no evidence before the Commission that the Applicant was ever warned in relation to her performance if it is that her performance provided the reason for dismissal.
(f) & (g) 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 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
[100] The Respondent’s business is a small business with 3 employees including Mrs Birkill at the time the Applicant’s employment was terminated.
[101] Whilst Mrs Birkill had access to Mr Gibson and, in determining to issue the redundancy, some legal advice I do consider that the manner in which the termination of employment was effected was affected by the size of the business and the lack of access to human resources or legal expertise.
[102] As I found above, I am satisfied that the breakdown in the personal relationship between the Applicant and Mrs Birkill was a major contributing factor as to the reason for dismissal. The size of the business and the lack of access to human resource expertise is reflected in the long period of time within which this breakdown of the relationship was allowed to fester. It is also reflected in the inability to separate the personal lives from the employment relationship. It is clear that Mrs Birkill did not know at times if she was acting as a mother or as an employer. To be clear I attribute no blame for that – it is reflective of a small, successful, family run business in circumstances where Mrs Birkill was looking forward to moving out of the business and hoping her daughter would take over. That clear boundaries as to work and the succession of the business within the family did not exist is evident to all. Its fall out is as well.
(h) any other matters that the FWC considers relevant
[103] This is a sad case where the relationship between a mother and daughter has broken down with consequences all round, including in their relationship as employer and employee.
[104] I have taken into account the actions and demands of the Applicant on Mrs Birkill in attempting to resolve the impasse over the October proposal and the tone of her text messages when she sought to return to work in August 2018. The text messages showed little respect for the person who ran the business she sought to return to work for. Her attempts to resolve the October proposal appear to have got out of hand with Mrs Birkill’s son (the Applicant’s brother) calling the Applicant and warning her to stop calling their mother. This conversation apparently occurred after over 15 phone calls were made by the Applicant to Mrs Birkill in one day.
[105] I have also taken into account that Mrs Birkill apparently changed her mind on the October proposal. Mrs Birkill stated:
Yes, I changed my mind, but I changed my mind for a very good reason. I changed my mind because of the conduct and the instability of Nicky’s behaviour from the time of the original discussion. And as I sit here now, in hindsight, I should have sat Nicky down or - and documented to her my reasons for it, but then I had mother hat and I also had a business owner’s hat. My mother hat was: all I wanted to see was my daughter get well and achieve things in her life, so I did not sit down and say that to her. 41
[106] It is not clear if she ever advised the Applicant of this change of mind.
[107] These circumstances do not reflect well on either party and ultimately balance each other out.
[108] In Byrne v Australian Airlines Ltd 42 it was said that:
It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.
[109] Where there is no valid reason for dismissal it will generally be the case that the dismissal will be unreasonable.
[110] Whilst there may well have been grounds to dismiss the Applicant from her employment, the lack of a valid reason and the absence of procedural fairness weigh heavily in favour of a finding that the dismissal was both harsh and unreasonable. These two matters are not sufficiently outweighed by any other consideration although I have taken into account the size of the business.
[111] For the reasons given I am therefore satisfied that the dismissal was both harsh in that it was punitive and unreasonable.
[112] For the reason given I am satisfied that the Applicant was unfairly dismissal.
[113] The Applicant does not seek reinstatement. In such circumstances I am satisfied that reinstatement is inappropriate. I will therefore consider compensation.
[114] Section 392 of the FW Act details those matters to be considered when determining compensation:
Remedy—compensation
…
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.”
[115] At the first day of hearing I indicated to the parties that if compensation was relevant the parties would be given an opportunity to put evidence and address me on that question. For this reason directions will be issued for the filing of evidence and submissions in relation to compensation.
COMMISSIONER
Appearances:
J. D’Abaco of Counsel for the Applicant.
J. Hooper of Counsel for the Respondent.
Hearing details:
2020.
Melbourne.
January 13.
Final written submissions:
Applicant, 24 February 2020.
Respondent, 4 March 2020.
Final oral submissions:
2020.
Melbourne by telephone.
March 20.
Printed by authority of the Commonwealth Government Printer
<PR718370>
1 Exhibit R4, paragraph 6.
2 Exhibit R4, paragraph 7.
3 Exhibit A1.
4 Exhibit A5.
5 Ibid paragraph 35.
6 Exhibit A17, attachment NB7.
7 Exhibit A17, attachment NB8.
8 Brett is the Applicant’s bother.
9 Exhibit R5, attachment JB6.
10 Exhibit R5, attachment JB7.
11 Exhibit A17, paragraph 85-86.
12 Exhibit A17, attachment NB9.
13 Exhibit A4.
14 Book-keeper for Pea in a Pod.
15 Exhibit A13.
16 Exhibit A14.
17 Exhibit A17, attachment NB11.
18 Exhibit R4, attachment JB2. Whilst it was not clearly stated I take the reference to “Sarah” to be a reference to the Book keeper and the reference to “Jennie” to be Mrs Birkill.
19 Transcript PN937.
20 Transcript PN951.
21 Transcript PN967.
22 Transcript PN972.
23 Exhibit R5 paragraph 35.
24 Exhibit A5 paragraph 35.
25 Transcript PN698.
26 Transcript PN587-591.
27 Transcript PN628.
28 Transcript PN886.
29 Exhibit R1.
30 Transcript PN1247.
31 Transcript PN1279.
32 Transcript PN1474.
33 Exhibit R5, attachment JB7.
34 Transcript PN1466.
35 Transcript PN1440.
36 Transcript PN1442.
37 Noting that whether a position is genuinely redundant does not extend to the process by which a person is selected for redundancy. See Explanatory Memorandum to the Fair Work Bill 2008, paragraph 1553.
39 [1996] IRCA 496.
40 Exhibit A13.
41 Transcript PN619.
42 [1995] HCA 24 (11 October 1995) per McHugh and Gummow JJ.