s.394 - Application for unfair dismissal remedy

• [1] The Applicant, Mr Stephen Reed worked for The Trustee for MCLC Trust T/A Macrospec (the Respondent) as an electrical apprentice between 10 April 2023 and 8 November 2024 when he was dismissed, ostensibly for reason of redundancy.

• [2] Macrospec is a small enterprise providing agricultural services and, at the time Mr Reed's termination of employment, directly employing only 4 people, including him. Macrospec argues it is a small business employer for the purposes of the Fair Work Act 2009 (FW Act) and because of its size it has no obligation to pay redundancy pay to Mr Reed.

• [3] Mr Reed contests both that his termination of employment was a genuine redundancy and that the respondent is a small business employer as defined by the FW Act.

• [4] Mr Reed's application was the subject of determinative conference conducted by me on 5 February 2025. Mr Reed appeared and gave evidence on his own behalf, and Mr Jamie de Bono, Macrospec's General Manager, appeared for and gave evidence on behalf of the Respondent.

• [5] For the reasons set out below, I am satisfied that Mr Reed's dismissal was a genuine redundancy and that it is unnecessary for me to determine whether Macrospec is a small business employer.

• [6] Mr Reed was employed by Macrospec from 10 April 2023, commencing as a mechanical technician. He later entered into an apprenticeship, with a contract of training relating to his apprenticeship registered on 4 August 2023. The apprenticeship was to run for 4 years, until 2 August 2027.

• [7] Mr Reed's duties included providing mechanical service and installation work associated with egg processing equipment. The work was undertaken across Victoria and interstate. Mr Reed gives this description of the Respondent's work, as well as its association with another entity, Ramp Advisory Partners;

"o Macrospec is the exclusive Australian agent for Sanovo Technology Group, a global manufacturer of egg processing machinery.

o This allows Macrospec to fully install, maintain, service, and fault-find Sanovo machinery, which is used in many of the farms and facilities linked to Ramp Advisory Partners.

o Macrospec employees, including myself, worked on installations and servicing across these interconnected poultry businesses, demonstrating the overlap in operations.

o Macrospecs primary service sector is the electrical sector, employing Licenced electricians, electrical apprentices and mechanical technicians."[1]

• [8] Mr de Bono's evidence draws a distinction between the work Mr Reed performed under his substantive role, as a mechanical technician, and the duties associated with his apprenticeship.

"5. On 23 October 2023, Mr Reed began an apprenticeship as an Apprentice Electrician. His primary and substantive role with Macrospec remained as a Mechanical Technician. His role involved attending customers' sites to service equipment and undertaking electrical training when customers were happy for me to send two technicians, with Mr Reed sometimes being engaged at a discounted rate to customers out of courtesy.

6. At no stage did we reduce Mr Reed's wages when undertaking duties related to his electrical apprenticeship, he always retained his Mechanical Technician rate in accordance with his employment contract."[2]

• [9] Because of the need to work across the state and interstate, Mr Reed purchased a vehicle to undertake the required travel and was paid a weekly car allowance of $220 for that purpose.

• [10] In May 2024, Mr Reed joined the Australian Army Reserve and participated in training and other activities associated with the Army Reserve. This occurred on three separate occasions between August and October 2024, with Macrospec saying the activities were over 28 days.

• [11] Macrospec attributes its termination of Mr Reed's employment to the impact on its business of avian influenza, pointing to an outbreak in Victoria on or around 20 May 2024. It says the outbreak heavily impacted its business and that Mr Reed's absences with the Army Reserve provided respite from some of the downturn caused by the avian flu outbreak:

"8. In, or around 20 May 2024, the Avian Influenza (AI) outbreak occurred in Victoria and impacted heavily on the business. Almost all scheduled work was put on hold or cancelled, with the exception of some work interstate and an installation in New Zealand.

9. Significant effort was made to retain Macrospec's workforce; staff took leave when possible, Macrospec reached out to customers internationally in the hope of finding work in order to retain employees, ultimately successfully sending one employee to Malaysia for 28 days to assist with an installation (at the customer's expense).

10. In May 2024, Mr Reed joined the Army Reserves, which resulted in his attending compulsory training on 3 separate occasions between August and October 2024 on a total of 28 days. This period did however provide the business with an opportunity to try and ride out the impacts AI was having on the business.

11. I managed to in early September, to pick up some work assisting a customer to relocate his egg grading operations and crate washing operations of his business to a new premisses. Macrospec also provided electrical services to other farms within his business, to improve the biosecurity of each site after his business was also impacted by AI (including electrical installation of automated wheel washes, showers, assist in relocation and installation of egg grading and packaging equipment, including commissioning). As this work was nearing completion and still with no improvement in the servicing space, I was forced to make the hard decision to make the Mechanical Technician role redundant."[3]

• [12] Mr de Bono says that in November he began a consultation process with staff "advising them of some impending operational and business structure changes and to keep an eye out on their email for further updates."[4]

• [13] On 6 November 2024, Mr de Bono emailed Mr Reed a "redundancy consultation notification letter" and then met with him on 8 November 2024. The cover email and a letter attached to the email set out the following (each so far as is relevant);

As per our earlier discussion, due to a downturn in Macrospec's current operations, and limited future planned and scheduled work I have had to make the hard call after a detailed review of the business expenses commence a redundancy consultation process.

Please find attached letter for your review and discussion, Chelsey and I have scheduled a meeting to discuss this with you on Friday at 2.30pm

I am writing to inform you that Macrospec has currently undergone a review of the structure, positions and business operations. Due to economic downturn, it has been necessary to review the Company's requirements of the role of Mechanical Technician across the organisation. As a consequence of that review, it has been identified your role as one that might be made redundant.

We are initiating a redundancy consultation process, where you will be given an opportunity to give reasons why your role should not be made redundant or hear and discuss any redeployment opportunities that may be available. A meeting has been arranged to discuss this matter on Friday 8th November at 2:30PM. This meeting will be led by Chelsey Fourie (HR) and myself."[6]

• [14] The reference to Chelsey Fourie is to an external human resources consultant working for a firm by the name of People Positive. Both Mr de Bono and Ms Fourie attended the meeting with Mr Reed on 8 November 2024. In that meeting, Mr de Bono says that "Macrospec offered Mr Reed the opportunity during his 2 weeks' paid redundancy period to complete the final first year modules by attending trade school between 11 November 2024 to 15 November 2024. The business also offered Mr Reed the opportunity to retain the Macrospec provided fuel card to cover his travel from Geelong to Ballarat University, to attend trade school".[7]

• [15] Mr de Bono submits that Mr Reed did not take up his trade school offer, as he "instead chose to work for a new employer".[8]

• [16] Following the meeting on 8 November 2024, Mr de Bono sent Mr Reed a termination letter which stated, among other things;

Termination of your employment by reason of redundancy

The purpose of this letter is to confirm the outcome of a recent review by Macrospec (the employer) of its operational requirements, and what this means for you.

Following the consultation meeting on 08 November, and as a result of the impact of Avian Influenza, the economic downturn and resulting restructure, the position of Mechanical Technician is no longer needed. Regrettably this means your employment will terminate. This decision is not a reflection on your performance.

Unfortunately, at this time there are no alternative positions within the enterprise and associated entities appropriate for redeployment.

Your employment will end immediately. Based on your length of service, your notice period is 2 weeks which we do not require you to work and will be paid in lieu. ..."[9]

• [17] The payment made to Mr Reed included 2 weeks' notice and 116.6 hours accrued annual leave. The termination letter also reiterated the offer made to Mr Reed in the meeting about trades school attendance, stating;

"Further to this, we will support you closing your electrical apprenticeship school term next week, and will continue to pay for travel costs as previously covered.

Once closed, the fuel card and all equipment will need to be returned."[10]

• [18] Macrospec's ownership structure was the subject of submissions by Mr Reed, with him putting forward that it was not a small business employer at the time of his dismissal. He argued that Macrospec;

Through my employment at Macrospec Pty Ltd, I observed that the company did not operate in isolation but was part of a larger interconnected network of businesses, all of which appeared to be managed under the umbrella of Ramp Advisory Partners, with Bradley McAuliffe as the CEO. The businesses within this group each had distinct roles but were operationally intertwined, sharing leadership, resources, and employees.

o Ramp Advisory Partners functions as the head of the organisation, overseeing the management and operations of multiple entities.

o Bradley McAuliffe, as CEO, was heavily involved in the management of Macrospec and other related businesses.

o Employees across the various entities were subject to shared oversight, direction, and administrative systems, including payroll, HR management, and work allocations.

o Vaxa Poultry operates a small farm in Moolap, located behind 36 Chipperfield Drive.

o The farm manager, Jasmine Curtis, oversees operations where freshly hatched chickens are raised until approximately 16-19 weeks old before being transported to egg farms for laying production.

Surf Coast Eggs - 80 Keilambete Rd, Terang VIC 3264

Grampians Eggs - 357 Fitzpatrick Rd, St Arnaud North VIC 3477

o B&R Poultry Services provides specialist services to the poultry industry, including:

o Macrospec is the exclusive Australian agent for Sanovo Technology Group, a global manufacturer of egg processing machinery.

o This allows Macrospec to fully install, maintain, service, and fault-find Sanovo machinery, which is used in many of the farms and facilities linked to Ramp Advisory Partners.

o Macrospec employees, including myself, worked on installations and servicing across these interconnected poultry businesses, demonstrating the overlap in operations.

o Macrospecs primary service sector is the electrical sector, employing Licenced electricians, electrical apprentices and mechanical technicians.

o Sanovo Technology Group is an international company that manufactures egg processing machinery used in egg farms and poultry production.

o Macrospec's sole Australian agency rights meant that the machinery used withinthe network of farms (Surf Coast Eggs, Grampians Eggs, AVGO Eggs) was serviced exclusively by Macrospec employees."[11]

• [19] Mr Reed put forward a list of 16 people he says were employed by Macrospec at the time his employment ended. The list includes Mr Reed and Mr de Bono, and 14 others. The evidence about the table of employees shows;

• • 5 are employed by Macropsec (Reed, de Bono, Employee X[12]; Pearson and Hay);

• 2 are with Surf Coast Eggs (Colla and D Bampfield);

• 4 are employed by RAMP (McAuliffe, Lakakis, Irvine and Thomson);

• • 2 are with Vaxa Poultry (S Bampfield and Curtis).[13]

• [20] Mr de Bono conceded that while Mr Colla was presently assigned to work for Surf Coast Eggs, he was employed by Macrospec.[14]

• [21] The above summary of employees identifies 13 employees, leaving 3 unaccounted for. The summary shows that at the time of his dismissal, Macrospec had no more than 6 direct employees (Reed, de Bono, Employee X, Pearson, Hay and Colla), or at most 9, if it were assumed the three employees not mentioned in the evidence were employed by Macrospec. However that assumption would not be supported by Mr de Bono's direct evidence (albeit that his evidence is that Mr Reed was the fourth employee on his books[15]).

• [22] Mr Reed argues common ownership of the businesses to which he refers, saying "It's common knowledge in Macrospec that there's at least two owners of Macrospec. One is Luke Colla, and the other one is Bradley McAuliffe, who is his brother-in-law".[16] He accepted though that Macrospec was owned through a trust, the MCLC Trust.[17]

• [23] Mr de Bono refutes the ownership construct put forward by the Applicant, submitting Macrospec's ownership is singular; "The owner of the business is Luke Colla. Brad owns farms and, as a farm owner, you are not allowed to own an associated business to supply or service egg processing and packaging equipment. So certainly, that's not a position that he's able to hold."[18]

• [24] For its part, Macrospec maintain that it is a small business employer and is a "stand-alone business" with no associated entities. Mr de Bono gave evidence that "Macrospec engages a private consultancy business, Ramp Advisory Partners, to provide services pertaining to human resources, information technology and accounting".[19] Mr de Bono elaborated on this and arrangement in his oral evidence;

"MR DeBONO: Yes, no worries. I suppose I'm going to be in the same position as Steve going through the workforce. Macrospec are a small business. We provide contracted services to a number of businesses, in farms, in Australia and New Zealand. The installation equipment has an important purpose for Sanovo equipment around the country.

Our relationships with the entities that Steve talks about, we provide contracted service with those. My relationship with RAMP is they provide me with, and we pay a monthly fee to RAMP to provide HR services, IT services, payroll, finance, and some of our software as well is processed through them as well. As a small business, we can't afford employing those types of people to provide them all services, so we outsource those."[20]

• [25] In the course of the determinative conference held by me I expressed the view to the parties that I considered it to be unnecessary for me to determine definitively whether Macrospec is a small business employer as defined in the FW Act. This was because the overall evidence leans toward a finding that Mr Reed's dismissal was a genuine redundancy. A finding of that type is not affected by the question of whether the Respondent's enterprise is or is not a small business employer.

• [26] While s.396 requires the Commission determine, as an initial matter, whether a dismissal that is the subject of an unfair dismissal application was "consistent with the Small Business Fair Dismissal Code", the Respondent's assertion that it was consistent rests on its case that the position was redundant. The Code though does not deal with matters of redundancy and so a finding of consistency with the Code is not available to me. The size of the enterprise though may have relevance if I formed the view the dismissal was not a genuine redundancy.

• [27] The question of whether Mr Reed's termination of employment was a genuine redundancy is in several parts, which are dealt with below. One of those parts, being the consideration of redeployment, invites consideration of associated entities of the Respondent which I also deal with below, as I am of the opinion there is sufficient evidence for me to reach a conclusion on that subject.

• [28] The term "genuine redundancy" is defined in s.389, which is in these terms;

(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:

(b) the enterprise of an associated entity of the employer."

• [29] The definition is in three parts; the continuing need for the person's job; consultation as may be required; and considerations of redeployment.

• [30] As provided for in s.389, a person's dismissal was a case of genuine redundancy if their employer no longer required the person's job to be performed by anyone. The evidence shows that Mr Reed's job fitted this circumstance. Macrospec no longer required his services because of its financial situation, which had been caused by a downturn in its business stemming from avian flu.

• [31] In order for the dismissal to be a "genuine" redundancy, the employer must have also complied with the obligation in any applicable modern award or enterprise agreement to consult about the redundancy (s.389(1)(b)).

• [32] Although there is no enterprise agreement applicable to Mr Reed's employment, Macrospec put forward that his employment was covered by the Pastoral Industry Award. I doubt that the award coverage is correct and expressed that view to the parties in the course of the determinative conference conducted by me.

• [33] The Pastoral Industry Award coverage clause is expressed as applying to "employers throughout Australia in the pastoral industry and their employees in the classifications set out in this award to the exclusion of any other modern award". The term "pastoral industry" is defined thus;

"4.2 Pastoral industry means all employers and employees who are engaged in or in connection with:

(a) the management, breeding, rearing or grazing of livestock or poultry;

(b) the shearing and crutching of sheep and the classing and pressing of wool on farms;

(e) the sowing, raising or harvesting of broadacre field crops and other crops grown as part of a broadacre mixed farming enterprise;

(f) the treatment of land for any of these purposes; or

(g) clearing, fencing, well sinking, dam sinking or trenching on such farms or properties."

• [34] The evidence before me does not suggest Macrospec is engaged "in or in connection with" the "the management, breeding, rearing or grazing of livestock or poultry". Instead, it appears to be engaged in or in connection with the installation and maintenance of electrical equipment.

• [35] Despite this, it is unnecessary for me to determine the matter in this decision as the focus is upon the text of s.389(1)(b) which considers whether there has been compliance by the employer "with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy". There are at least two alternatives of award coverage to the Pastoral Industry Award, being the Manufacturing and Associated Industries and Occupations Award 2020 or the Electrical, Electronic and Communications Contracting Award 2020. It is not necessary for me to precisely determine award coverage since each of the alternative awards require an employer to consult with their employees in the case of impending dismissal for reason of redundancy.[21]. I am satisfied in the circumstances that there was a necessity for Macrospec to consult with Mr Reed prior to his dismissal, with the evidence showing the obligation was discharged.

• [36] The consultation which Macrospec points to consists of the notification email and letter sent to Mr Reed on 6 November 2024 and the contents of the meeting held with him on 8 November 2024, which was also attended by Mr de Bono and Ms Fourie.

• [37] Mr Reed gave this evidence about the meeting;

"THE COMMISSIONER: Sure. But let's come back to the meeting.

THE COMMISSIONER: So who did the talking in the meeting?

MR REED: She went through a script of, essentially, what was required. She told me that the role was being made redundant, not myself, the role. And due to that redundancy, my employment would be terminated. She emphasised that it was not due to my Reserve commitments. If anything, that they had actually helped to prolong my employment.

THE COMMISSIONER: Right. And what else did she say?

MR REED: Aside of that, not too much else. I mean, they went through the process. They covered all the topics they needed to cover.

THE COMMISSIONER: Did they ask you your opinion, or ideas about the subject?

MR REED: Yes, they did. They've asked me my views on it. I told them at that point that my views on it were that I don't believe that redundancy reason is genuine. It doesn't add up.

THE COMMISSIONER: Before you said that, did they explain to you, and who explained it to you, why the position was redundant?

MR REED: Chelsea explained it to me. She explained that due to avian influenza, and a downturn in the market, that my role was being made redundant." PN 124 - 137

• [38] Mr de Bono argues that Macrospec followed the right processes to consult with Mr Reed noting that his is a small business and that it does not have other entities associated with it. Because of that, he did not have an opportunity to redeployment to Mr Reid that he otherwise would have, because he considers Mr Reid to be a good worker.[22]

• [39] The obligation of the modern award to consult with employees about impending redundancy is not an obligation to reach agreement about the situation. Instead, the obligation becomes an opportunity for the affected person to put forward why their job should not be considered to be redundant or to discuss other measures which might avoid the need for dismissal or reduce the impact of the decision. This may include moving the redundant person into another position, even one which is lower paid or some distance away from the existing employment base.

• [40] On the basis of the evidence given by Mr de Bono, I consider Macrospec has complied with its obligation to consult. Having formed the view that Macrospec needed to reduce its costs and in particular to do so by dismissing Mr Reed, a conversation that led to reversal of that decision was always going to be tough, with a change of course unlikely.

• [41] The obligation within s.389(2) for an employer to consider redeployment of an individual, for their termination to be considered a genuine redundancy, is directed to whether it would have been reasonable in all the circumstances for the individual to be redeployed within the employer's enterprise or that of an associated entity.

• [42] The Full Bench has described the analysis to be undertaken in this regard in the following manner:

"For the purposes of s.389(2) the Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer's enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must also be an appropriate evidentiary basis for such a finding."[23]

• [43] Mr Reed submits that he did not believe that redeployment efforts had been made, particularly because the respondent's associated entities are quite large and he considered it likely that there would have been alternative roles for him throughout the other businesses within the group.[24] However, this is an insufficient basis from which to proceed.

• [44] The evidence given by Mr de Bono relating to Macrospec's company structure and its relationship with other entities is capable of acceptance. He describes a commercial arrangement with Ramp as well as identifying the "owner" of Macrospec as Mr Colla, while accepting that Macrospec was owned through a trust, the MCLC Trust. Mr de Bono's evidence about the commercial relationship with Ramp is as sensible as it is plausible. On the other hand, Mr Reed's assertions about the business arrangements of Mr McAuliffe and Mr Colla are only that and do not rise to the standard that would be required, which ultimately requires consideration of the tests in s.50AAA of the Corporations Act 2001. The evidence before me on those considerations is general and insufficient for such a finding to be made.

• [45] Moreover, and with greater relevance to s.389(2), Mr Reed has not identified to me a particular position open at the time of his termination to which he could be redeployed, saying to Mr de Bono in the meeting prior to his termination "there would have been roles throughout the other businesses".[25] In his evidence to me, Mr Reed was asked about positions he could be redeployed into:

"THE COMMISSIONER: All right. Well, thank you. And so knowing what you know now, do you see, anywhere in the structure that you have taken me through, jobs that you could have been redeployed into?

• [46] I am unable to find from these matters that it would have been reasonable in all the circumstances for Mr Reed to be redeployed within Macrospec or elsewhere.

• [47] It follows from the above analysis that I accept Mr Reed's dismissal was a genuine redundancy, being one of the initial matters that must be considered before consideration of the merits of his application.

• [48] Mr Reed's application is determined accordingly and an order dismissing his application will be issued at the same time as publication of these reasons for decision.[27]

[1] Reed Witness Statement; Digital Hearing Book (DHB), p.71.

[2] de Bono Witness Statement; DHB, pp.166 - 167.

[7] Respondent Outline of Submissions, [28]; DHB, pp.162 - 163.

[9] Termination Letter - Steven Reed; DHB, p.6.

[11] Reed Witness Statement; DHB, pp.70 - 71.

[12] The name of the person was indistinct on the transcript.

[19] de Bono Witness Statement, [4]; DHB, pp.449 - 450.

[21] See Pastoral Award 2020 [MA000035], cl.26; Manufacturing and Associated Industries and Occupations Award 2020 [MA000010], cl.41; and Electrical, Electronic and Communications Contracting Award 2020 [MA000025], cl.27.

[23] Technical and Further Education Commission T/A TAFE NSW v L. Pykett [2014] FWCFB 714, [36].

[27] PR786150.

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