DECISION

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

Sofia Manos
v
Transport Workers' Union of Australia
(U2020/4844)

Application for unfair dismissal remedy – whether genuine redundancy – whether harsh, unjust, or unreasonable – whether compensation appropriate – amount of compensation.

[1] This decision is about whether Sofia Manos, a member and former employee of the Victorian / Tasmanian Branch of the Transport Workers Union of Australia for more than 14 years, was unfairly dismissed.

[2] Ms Manos found employment with the Union through her mother, who at the time was its Office Manager. From 14 March 2006, she worked primarily in the Union’s Industrial section until 26 March 2020, when she was dismissed on the grounds of redundancy.

[3] Ms Manos disputes that the dismissal was a case of genuine redundancy. She is protected from unfair dismissal because her period of employment with the Union was longer than the minimum employment period and her annual remuneration of $90,675 plus superannuation and a mobile phone was less than the high income threshold.

[4] At the time of dismissal, the Union had at least 25 employees. It was not a small business employer and the Small Business Fair Dismissal Code did not apply.

Was the dismissal a genuine redundancy?

Did the Union no longer require Ms Manos’ job to be performed because of changes in its operational requirements?

[5] There is a dispute about precisely what job Ms Manos was performing at the time of dismissal. While her role title was ‘Industrial Administrator’, the nature of the role and what it entailed is in dispute. Ms Manos says she prepared and filed applications to the Commission dealing with disputes, enterprise agreements, protected action ballots, right of entry notifications, permits and returns. She says she had a role in drafting enterprise agreements, updating annual wage sheets for six or seven modern awards and advising members about rates of pay.

[6] The Union’s case seems to be that Ms Manos’ role had effectively been redundant for years. In the years gone by, it says Ms Manos provided administrative support to Industrial Research Officer, Howard Smith. A large proportion of her duties ceased or were reduced after Mr Smith left the Union approximately four years ago and legal and industrial officers were employed.

[7] Ms Manos concedes that some of the work she had performed in the past was reallocated to others after 2016. However, she insists she remained active in her role and in addition to various lodgement and administrative tasks, was known as the “EA person” – that is, the person Organisers would ring for advice or assistance with enterprise agreements. I accept this evidence.

[8] I prefer Ms Manos’ evidence as to the nature of her role at the time of dismissal. It is consistent with a direction from National President and Victorian/Tasmanian Branch Secretary John Berger, upon assuming the role of Branch Secretary in 2016, that Ms Manos should “continue doing what [she] was doing”. It is also implausible that Ms Manos would have been retained for such a long period without meaningful work to perform.

[9] In early March 2020, the Union’s National Committee of Management resolved to suspend an industrial campaign which had been planned since 2017 and was due to crystallise in 2020. The ‘2020 Fight Campaign’ was aimed at improving industry rates and conditions by enterprise agreements with approximately 200 aviation and road transport employers. It relied on a range of enterprise agreements expiring at the same time in 2020.

[10] Nobody could have foreseen that this timing would coincide with a global pandemic, with serious economic consequences for both the aviation and transport industries. Social distancing measures and limits on movement made campaign logistics practically impossible. Instead, the Committee moved to delay the campaign until at least September 2021. It also resolved to defer enterprise agreement negotiations in favour of Memorandums of Understanding where appropriate.

[11] These resolutions, together with the prospect of COVID-19 pandemic-related work and movement restrictions, gave Mr Berger cause to consider the likely effect of reduced labour demand on membership levels – and membership fees. He formed the view that ‘drastic action’ was required to secure the Branch’s financial position. It is likely that he also anticipated less work in connection with enterprise agreements for the duration of the pandemic. He formed the view that savings could be achieved by the redundancy of two positions, one of which was held by Ms Manos.

[12] On Tuesday 24 March 2020, there was a meeting of the Union’s Branch Committee of Management. Mr Berger made a number of reports to the meeting, including about how the pandemic was likely to affect the Branch. Minutes from the meeting disclose a resolution to make one employee, John Simpson, redundant – with notice to be given that day and termination to take effect four days later on 27 March 2020. The minutes include a copy of the letter of termination. There is no mention in the minutes of any other anticipated redundancies. There is no mention in the minutes of Ms Manos.

[13] The minutes of the Branch Committee meeting of 24 March 2020 do disclose a separate resolution to maintain an increase in working hours for Cassidy Guyett, Industrial Officer, by 7 hours per week, including for the purpose of assisting with “the industrial workload”. I infer that this included work that might once have fallen within Ms Manos’ remit as Industrial Administrator.

[14] Mr Berger says the Committee discussed the potential for future redundancies as a ‘knock on effect’ of the pandemic. I accept this may have been discussed in general terms, but not in the context of a future that was only two days’ away. I do not accept that the redundancy of Ms Manos’ role was discussed in the meeting in any specific way. No such proposal was put or endorsed. Had it been, the matter would have been recorded in the minutes and endorsed by the Committee as had occurred in relation to Mr Simpson. In any event, Mr Berger had not yet decided to make Ms Manos’ position redundant.

[15] After the Branch Committee meeting, Mr Berger met via Zoom with Officials of the Union, flagging the potential for job losses among the group. There is no evidence that he held any similar discussions with office or general staff including Ms Manos.

[16] At some point between 24 and 26 March 2020, Mr Berger decided to dismiss Ms Manos on the grounds of redundancy. Neither Mr Berger, nor the Union’s Office Manager Daniela Fragale, who he consulted about it, were able to identify the date on which they discussed ‘abolishing’ the position of Industrial Administrator. Mr Berger says it was after the Branch Committee meeting and Ms Fragale says it was one or two days before 26 March 2020. Once the decision was made, Mr Berger asked Ms Guyett to draft the letter of termination. At the time, Ms Guyett worked Mondays and Tuesdays in the office and Fridays from home.

[17] I find that the decision to make Ms Manos’ position redundant was made on Tuesday 24 March 2020 after the Branch Committee meeting had concluded. On that day, the issues confronting the Union were front of mind for Mr Berger. It makes sense that in addition to discussing his concerns with Branch and Union Officials, he also discussed them with Ms Fragale. It was also a working day for Ms Guyett, which means she was available to draft the letter of termination.

[18] I am satisfied that at the time of dismissal, Ms Manos’ job was no longer required by the Union to be performed by anyone. Instead, the various tasks of Industrial Administrator were to be redistributed among the legal and industrial officers of the Branch or devolved to Organisers. The decision was made because of anticipated ‘knock on’ effects of the pandemic on the Union’s financial and industrial position and related resolutions to suspend the 2020 Fight Campaign and defer enterprise agreement activity for a time.

Failure to consult under the Award

[19] A dismissal is not a genuine redundancy under the Act unless the employer has complied with relevant applicable modern award consultation obligations. 1 In this case, the parties agree that Ms Manos was covered by the Clerks – Private Sector Award 2010.

[20] Clause 8 of the Award required employers to consult about major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees. Clause 8 applied to the suspension of the 2020 Fight Campaign and the deferral of enterprise agreement-related activities in early March 2020. Each of these matters had the potential to change existing employment arrangements in the Union in significant ways, including by potential loss of jobs or reduced working hours.

[21] Under clause 8, as soon as practicable after these decisions were made and adopted by the Branch, the Union was required to:

(a) give notice of the changes it had decided to make to all employees who may be affected by them and any of their representatives; and

(b) discuss with them the introduction of the changes, their likely effect on employees; and measures to avoid or reduce the adverse effects of proposed changes.

[22] It was also required to give affected employees all relevant information about the changes in writing, including the nature of the changes, their expected effect and any other matters likely to affect employees.

[23] After the National Committee of Management meeting in early March 2020, Mr Berger decided that steps were required to ensure the Branch would be viable going forward given the prospect of significant membership losses. He was focused on reducing costs, and wages were one of the Union’s biggest costs. In a relatively short space of time, he decided to make the positions of Mr Simpson and Ms Manos redundant.

[24] There is no evidence of any consultation with Ms Manos about the effects of the pandemic on the Union, the suspension of the 2020 Fight Campaign, changes in the Union’s enterprise agreement strategy or process or the need to reduce costs generally. There was no consultation with Ms Manos about the redundancy before it took effect, and there was no consultation even when the decision was communicated to Ms Manos on 26 March 2020. There was no meaningful discussion about the introduction of changes, their likely effect on employees and measures to avoid or reduce adverse effects on employees. There was no information provided in writing to employees about the changes to be made.

[25] At its highest, the Union’s consultation process amounted to Mr Berger asking Ms Manos if she had “anything to say” after she had been told her position was redundant. It was not a fair question in the circumstances. Ms Manos had no advance warning of the meeting or its subject matter. She was not in a position to respond in any meaningful way. She was still absorbing the news that she had just lost her job after 14 years’ service and that it was to take effect immediately.

[26] The Union did not comply with its consultation obligations under the Award in relation to the redundancy of Ms Manos. The dismissal was not a case of genuine redundancy.

Reasonable redeployment

[27] A dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or that of one of its associated entities.

[28] I am not satisfied that it would have been reasonable in all the circumstances for Ms Manos to be redeployed within the Union, either at branch level or more broadly across the organisation. That is not to say that she could not have been, but simply that the evidence does not reach the requisite threshold to establish that there was an available role into which she could reasonably have been redeployed.

[29] Ms Manos points to the possible role of Industrial Inspectorate, which was being advertised at the time of her dismissal, but there is no evidence about whether Ms Manos held skills or qualifications that would support a finding that redeployment into the role was a reasonable prospect. Ms Manos also points to the employment of two new employees since her dismissal. There is no evidence that either vacancy existed at the time of dismissal such that Ms Manos could reasonably have been redeployed into either of those roles.

Was the dismissal harsh, unjust or unreasonable?

Criteria in section 387(a)-(c) and (e) – reasons for dismissal related to capacity or conduct

[30] For the reasons above, I find that there was a valid reason for the dismissal. The reason was not related to Ms Manos’ capacity or conduct but rather the Union’s financial and industrial position as a consequence of the pandemic. Ms Manos was notified of the reason for her dismissal on the day it took effect, but not of any reason relating to her capacity or conduct. As such, there was no opportunity to respond to concerns about her capacity or conduct. Ms Manos was not warned about unsatisfactory performance because her dismissal was not for that reason. These are neutral considerations.

Section 387(d) - was there any unreasonable refusal to allow a support person to be present to assist at any discussions relating to dismissal?

[31] There was no unreasonable refusal to allow Ms Manos to have a support person to assist in discussions about the dismissal. No such request was made, because Ms Manos was not aware when entering into discussion with Mr Berger and Ms Fragale on 26 March 2020 that she was about to be dismissed.

Section 387(f) and (g) – effect of size of enterprise and absence of dedicated human resources management specialists or expertise on procedures followed in effecting the dismissal

[32] The Union is an employee association, established under rules that have as one of their general objects “to promote, foster and maintain the best industrial interests of all Members.” Its specific objects include “to promote and encourage respect within the Union and amongst Members for the dignity and worth of the human person and in the equal rights of men and women.” It has specific experience and expertise in the development and maintenance of modern award terms and conditions of employment.

[33] As a key stakeholder in the development of modern awards, the Union’s failure to consult with Ms Manos about the redundancy cannot be the product of its size, ignorance or unsophistication. Both the Union and Mr Berger must be taken to be familiar with award consultation obligations and their purposes – including in providing an opportunity for meaningful consideration of alternatives and in promoting the dignity of those affected by decisions about which consultation is required. Indeed, these are matters that often lie at the heart of the Union’s work.

[34] Inexplicably, these purposes seem to have been completely put aside so far as Ms Manos was concerned. Mr Berger gave evidence to the effect that consultation about redundancy would not have made any difference to the outcome. And perhaps the redundancy of Ms Manos’ position was inevitable in the circumstances, but what was the haste in carrying it out?

[35] Consultation may have made a significant difference for Ms Manos, a longstanding employee with a substantial accrued leave balance. One possible alternative was for her to take a period of leave so that the question of redundancy could be revisited at a later stage once the effects of the pandemic on industry, and on the Union specifically, became more apparent. Any additional cost to the Union would have been minimal. Another possibility was the provision of short consultation period to afford Ms Manos time to finalise and handover outstanding work, collect her belongings and bid farewell to colleagues and friends.

[36] Instead, notice of termination and dismissal occurred on the same day on 26 March 2020 in circumstances akin to summary dismissal. It is to be remembered that this was in the very early days of Australia’s response to the unfolding health crisis and only two days after an application had been made to vary the Award to introduce pandemic-related flexibilities. It was also four days before the announcement of the jobkeeper scheme (although the Union did not ultimately become eligible for the jobkeeper scheme). The point is that it was a time of uncertainty for everyone. There was no reason to rush the decision or to give it effect in a way that was inconsistent with both the Award and the Rules instead of adopting proper process.

[37] Neither the Union’s size nor lack of access to resources helps to explain the procedural deficiencies that occurred in connection with the dismissal of Ms Manos.

Section 387(h) - other relevant matters

[38] Breach of Union Rules: Ms Manos says her redundancy was in breach of the Union’s Rules because it was not authorised by the Branch Committee of Management. The Union says the Rules empower the Branch Secretary to terminate the employment of employees. In any event, it says the decision to terminate Ms Manos was authorised by resolution of the Branch Committee on 29 April 2020.

[39] I do not accept that the rules confer general power to ‘hire and fire’ employees on the Branch Secretary of the Union. Rule 31(2)(i) gives the Branch Committee of Management the power and function of “employing persons to assist in carrying on the work of the Branch”. In my view, the power to employ includes the power to cease to employ. Minutes of various Branch Committee meetings over the past ten years tend to support this understanding, by containing as they do specific resolutions of the Branch Committee in connection with the employment or termination of an employee.

[40] Rule 37 deals with the powers and functions of the Branch Secretary who is the Chief Executive Officer of the Branch. These include acting as directed by the Branch Committee as well as being in charge of management of the Branch office and in charge of employees in the Branch office. While the power to employ and to dismiss Branch office staff sits with the Branch Committee, responsibility for managing employees while they are employed is delegated to the Branch Secretary.

[41] Rule 75 of the Union Rules deals with banking and expenditure. Rule 75(7) provides that expenditure of Branch funds may only be made by a resolution of the Branch Committee. There are two exceptions in relation to payments to National Council (not presently relevant) and one exception in relation to the payment of salaries of Officers and employees of the Union as well as regularly recurring expenses authorised by the Branch Committee.

[42] The payment of severance pay in connection with the redundancy of an employee is not the payment of a salary, which is a fixed periodic payment for regular work or services. Nor, in this case, is it a regularly recurring expense. Redundancies are relatively rare in the Union.

[43] In each of these respects, I accept that Ms Manos’ redundancy was implemented in a way that at the time, was not authorised by the Union’s Rules. In each case, the Branch Committee appears to have retrospectively endorsed the actions of Mr Berger on 29 April 2020 although the content of the resolution is not apparent from the minutes.

[44] Alleged breach of Award by an employee association: Ms Manos submits that the Union should be held to a higher standard in relation to award contraventions because of its special role in the advocacy and protection of industrial terms and conditions of employment. Except in the sense that it can be taken to have particular knowledge of, and commitment to, the award system and its underlying purposes (discussed above), I do not consider that the Union should be held to a higher standard than any other employer defending an unfair dismissal case. The law applies equally to all.

[45] Differential treatment as between employees: Mr Simpson, who was also made redundant in late March 2020, was given slightly more notice than Ms Manos. His dismissal took effect three days after notice of termination had been issued, whereas Ms Manos’ dismissal took effect immediately. Mr Simpson’s dismissal was the subject of prior resolution of the Branch Committee, unlike the dismissal of Ms Manos. In each case I accept that the process adopted was less favourable for Ms Manos than it was for Mr Simpson due to the haste with which the decision to dismiss was carried out.

[46] Personal and economic circumstances of Ms Manos: At the time of dismissal and for three months before it, Ms Manos had been having a difficult time. Her family was dealing with court proceedings involving family violence and had recently taken full custody of a child with special needs. They were reliant on Ms Manos as sole income earner. These matters were known to the Union. Ms Fragale denies that these were a consideration in connection with the redundancy, but they were matters that could have been discussed and considered in the context of seeking to mitigate the likely adverse effects of the redundancy on Ms Manos.

[47] Payment of entitlements: On termination of employment, Ms Manos was paid her full entitlements including accrued leave, 4 weeks’ notice of termination and 12 weeks’ severance pay. Ms Manos contends that she was paid less than the Union’s standard policy of 3 weeks’ severance per year of service. This was once the Union’s policy, but things had changed by the time of Ms Manos’ dismissal. Branch Committee minutes of 13 December 2016 confirm a change in wages policy with effect from 1 January 2017. The National Employment Standards were endorsed as providing general terms and conditions of employment for salaried staff, supplemented by additional long service leave and personal leave but not additional redundancy pay.

[48] Alleged intimidation of witnesses: In final submissions in this matter, Ms Manos makes the following allegation:

“It has been stated to the Applicant by several employees of the respondent that remarks have been made to them that if they spoke to, or assisted the applicant in any capacity even if Orders were granted by the Commission to appear, that their employment with the TWU would be in jeopardy.”

[49] These are serious allegations. I am not in a position to test their veracity. They are matters that should be referred to the Fair Work Ombudsman for investigation. As the allegations are both unsourced and untested, I have given them no weight in my assessment of the fairness or otherwise of Ms Manos’ dismissal.

[50] Other matters: There are a number of factual assertions made in this matter for the first time by way of closing submissions. The late addition of this material means that it was unable to be the subject of argument or cross examination. In the interests of procedural fairness to the parties, I have given these matters no weight.

Conclusion on merits

[51] On balance, I am satisfied the dismissal of Ms Manos was harsh and unreasonable. The dismissal was unfair.

Remedy

[52] The parties both agree that reinstatement would be inappropriate in this case and I agree. It is evident that the dismissal has had a damaging effect on the relationship between them. Instead, compensation is the appropriate remedy. There is no submission from the Union to the effect that a compensation order would affect the viability of its enterprise.

[53] Ms Manos was employed for over 14 years. It is a substantial period of service.

[54] Had the proper approach to consultation and compliance with the Rules been followed, I estimate that Ms Manos would have remained in employment for a further 5 weeks, ending on the day after the Branch Committee of Management met on 29 April 2020. Over this period, Ms Manos would have earned $8718.75 gross.

[55] I am satisfied that Ms Manos has taken reasonable steps since the dismissal to mitigate her loss. She successfully applied for a position but due to Stage 4 restrictions in Victoria a few days later, the offer of employment had not come to fruition at the time of hearing.

[56] Given the state of the labour market and the economy generally, no adjustment will be made for contingencies. I will leave the question of taxation to the parties and the Australian Taxation Office.

[57] Ms Manos was paid four weeks’ notice of termination and 12 weeks’ severance pay in addition to her accrued leave entitlements. These payments would also likely have been made on termination of employment at the end of the anticipated period of employment. No adjustment of the compensation amount is made on this account.

[58] There is no reason to adjust the amount of compensation for misconduct.

[59] I am satisfied that a compensation amount of $8718.75 gross is appropriate having regard to all the circumstances of the case. It reflects my estimate of Ms Manos’ likely loss had the dismissal not occurred when it did. It does not include any amount for shock, distress or the like. It does not exceed the statutory cap.

[60] I will order the Union to pay Ms Manos a gross amount of $8718.75 plus superannuation on the compensation amount. The amount will be payable within 14 days of the date of this decision.

COMMISSIONER

Appearances:

S Manos on her own behalf.
J Cooney for the Transport Workers’ Union of Australia.

Hearing details:

2020.
Melbourne (video hearing):
August 14.

Final written submissions:

Applicant, 9 September 2020.
Respondent, 7 September 2020.

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 1   Fair Work Act 2009 (Cth), s.389(1)(a).