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[2020] FWC 2671
plaintiff. The respondent was ordered to pay the applicant $6,500 plus $247 in superannuation within 21 days. The proceedings were otherwise concluded ([127]).
The Commission found that the employer did not discuss the proposed redundancy with Goldberg before dismissing her. Regular team meetings about daily work were not enough. That failure meant the dismissal did not qualify as a genuine redundancy, and the employer's Small Business Fair Dismissal Code argument did not fit its stated reason for dismissal. The Commission then found the dismissal unfair and ordered compensation instead of reinstatement. The decision states an award of $6,500 plus $247 in superannuation. It also contains an apparent arithmetic discrepancy: the reasons say ten weeks' pay plus 9.5% superannuation, while the order states $247 in superannuation.
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Rachael Goldberg worked as a part-time bookkeeper for The Advice Spot, a small financial and accounting business owned by Adam Hill. The decision records that she worked 25 hours each week, earned an annual salary of $45,682 and had four years’ service ([1]). She was dismissed on 27 November 2019 while on leave in the United States. Hill sent an email saying the business was restructuring and there was insufficient work for her role. He said the decision was not a reflection on her performance and offered four weeks’ pay in lieu of notice ([1]).
The parties gave sharply different accounts of why the dismissal occurred. Hill said the business had lost clients, was not meeting targets, had cash-flow difficulties and needed to reduce costs. Goldberg said there had been no meaningful consultation about a redundancy, and contended that her pregnancy and moving a family home loan outside the business were the real reasons. She also challenged the employer’s account of the business’s financial position ([2], [32]-[41]).
The Commission’s decision turned primarily on the procedural and jurisdictional requirements for a genuine redundancy. It considered whether the job was no longer required, whether Hill had complied with the relevant award’s consultation requirements, and whether redeployment would have been reasonable ([84]). It found that the employer did not consult Goldberg about the proposed redundancy before dismissing her. The ordinary staff meetings relied on by Hill concerned work allocation and updates, rather than a proposed redundancy or its effects ([92]-[96]).
The Commission rejected both jurisdictional objections. It found the dismissal was not a case of genuine redundancy because the consultation requirement had not been met, and found the Small Business Fair Dismissal Code did not apply to the reason advanced for the dismissal ([96], [100]). It then found the dismissal harsh, unjust and unreasonable and ordered compensation rather than reinstatement ([113], [116], [126]-[127]).
The decision was amended after issue: the notice at the start of the supplied text says paragraph [122] was corrected by replacing “four” with “two”. The operative reasons supplied here therefore assess two weeks as the period that would have been appropriate for consultation.
The decisive reasoning on genuine redundancy was the consultation failure. Section 389, as reproduced in the decision, requires that the employer comply with any obligation in an applicable modern award or enterprise agreement to consult about the redundancy ([65]). The Commission explained that consultation requires more than exchanging information. It includes giving notice of the subject, providing a meaningful opportunity to express views, and considering those views. Consultation is not a veto, but it must occur before the employer has made and acted on a final decision ([75], [77]).
The Commission accepted that the work previously performed by the applicant and other staff could have been distributed among Hill, a contractor and possibly family members. That arrangement could “prima facie” fit an example of redundancy involving redistribution of work ([90]-[91]). But that did not resolve the statutory test. The separate consultation condition was not satisfied.
On the evidence, the definite decision to make Goldberg’s job redundant was made on 27 November 2019. She learned of it in an email that day, while overseas on leave. The Commission found no discussion with her about the possible termination before she left, and no consultation after the email ([93]). The morning meetings did not change that conclusion. The evidence showed they were routine discussions about files, priorities and work allocation. They were not discussions about a likely redundancy or a business change requiring restructuring ([94]-[95]). The Commission therefore held that s 389(1)(b) had not been complied with, which was sufficient to defeat the genuine redundancy objection ([96]).
The Commission did not decide whether redeployment would have been reasonable. It said that question was unnecessary once the consultation failure had determined the jurisdictional objection. It added that redeployment consideration would involve a genuine discussion of possibilities, potentially including reduced hours or different work within the finance field ([97]). That observation describes the issue the Commission did not need to decide, rather than a finding that a particular alternative role was available.
The Code argument failed for a different reason. Hill relied on both genuine redundancy and compliance with the Small Business Fair Dismissal Code. The Commission considered those positions difficult to reconcile because the Code was directed to dismissals for misconduct or capacity, while the dismissal email expressly said the decision was not a reflection on Goldberg’s performance ([98]-[100]). It dismissed the Code objection as irrelevant to the case advanced.
On the merits, the Commission assessed the statutory s 387 factors together. It found the alleged pregnancy and loan-related reasons were not established on the evidence, but also found Hill’s later suggestion that workplace hostility or access to business records justified dismissal was unsupported ([104]-[106]). Applying the standard for a valid reason, the Commission concluded there was no valid reason for dismissal ([102], [106]). Goldberg was notified of the stated redundancy only when it took effect, and had not had an opportunity to respond ([107]-[108]). The absence of a support-person issue and the lack of a performance concern were neutral factors ([109]-[110]).
The small size of the business and absence of dedicated HR expertise did not excuse the procedure. The Commission said those circumstances could be relevant under s 387, but they did not justify failing to follow a fair process and award obligations ([111]). It also considered Goldberg’s service, prospects in light of the birth of her second child, and the manner of notification ([112]). Its overall conclusion was that the dismissal was harsh, unjust and unreasonable in substance and procedure ([113]).
The decision does not announce a new statutory test for genuine redundancy. It applies the three-part framework in s 389: whether the job is no longer required because of operational changes, whether the employer met applicable consultation obligations, and whether reasonable redeployment was available ([65], [67], [84]). The judgment’s important practical point is that these matters are separate. Evidence that work has been redistributed or that a business has changed does not remove the independent requirement to comply with an applicable award consultation clause.
The decision draws on earlier authority to explain that redundancy is contextual and concerns the job, not simply the employee. It refers to Amcor for the proposition that redundancy is not a concept of fixed and inflexible meaning ([68]). It also discusses authorities concerning the abolition or redistribution of duties, including Spotless, Hodgson v Amcor, Ulan Coal and Dibb ([69]-[73]). The Commission did not finally determine whether Goldberg’s job had ceased to exist because it found the consultation requirement was not met.
For consultation, the Commission adopted the Full Bench’s explanation in Consultation Clause in Modern Awards: consultation means more than telling an employee what will happen. The affected employee must receive information, be able to express a view, and have that view considered before the decision is finalised ([75]). The decision applied that framework to distinguish genuine consultation from routine workplace communications. Regular meetings, without notice of a proposed redundancy and an opportunity to influence the decision, were insufficient ([92]-[96]).
For the unfair dismissal assessment, the decision applied the settled requirement that the Commission consider all s 387 matters in totality rather than treat one factor as determinative ([103]). It also applied the “sound, defensible or well founded” formulation of valid reason cited from Selvachandran ([102], [106]). The resulting finding was specific to the evidential record and process in this case.
On compensation, the Commission referred to the established Sprigg approach but relied on Hanson for the proposition that the formula should not be applied rigidly. It treated the statutory direction to consider all circumstances as controlling ([117]-[118]). The judgment therefore applies, rather than displaces, the compensation framework: estimate lost remuneration, consider statutory adjustments and the cap, then ensure the amount is appropriate in all the circumstances.
At [75], the Commission adopts the proposition that “the word ‘consult’ means more than the mere exchange of information.” In plain English, informing an employee that a decision has been made is not the same as asking for and genuinely considering their views before deciding.
At [94], the decision says the redundancy decision was “fait accompli”. This means the employer’s decision was already settled when the applicant was notified, so the communication did not provide an opportunity to influence it.
At [95], the Commission rejects the suggestion that the routine morning meetings amounted to redundancy consultation. It characterises them as ordinary business practice about tasks and updates. The practical distinction is between general discussion of business conditions and a specific process about a proposed change that may affect an employee’s job.
At [96], the Commission states that failure to comply with the award consultation obligation meant the dismissal was not a genuine redundancy. That is the central jurisdictional holding.
At [106], the Commission finds there was no valid reason for dismissal. It did not accept that the employer’s later concerns about workplace tension and access to business records were supported by evidence, and contrasted those claims with the dismissal email’s statement that the decision was not a reflection on performance.
At [118], the Commission quotes the statement that “Sprigg is a useful servant, but is not to be applied in a rigid determinative manner.” This means the compensation formula is a guide, not an automatic calculation that displaces consideration of all the statutory factors.
There is also a numerical point worth noticing in the reasons and order. Paragraph [125] says the Commission considered that ten weeks’ pay plus 9.5% superannuation should be ordered. Paragraph [127] orders $6,500 plus $247 in superannuation. The recorded superannuation amount appears inconsistent with 9.5% of $6,500, which is $617.50. The supplied decision states the order as $247; the text alone does not explain the discrepancy.
The decision is most relevant where an employer relies on redundancy but an applicable modern award or enterprise agreement requires consultation, and the employee was not given a meaningful opportunity to comment before the final decision. The key factual features here were that the employee learned of the decision only when it was implemented, the employer did not raise the proposed redundancy with her beforehand, and ordinary team meetings were relied on as if they satisfied consultation ([92]-[96]).
It is also relevant where an employer says that routine discussions about business performance or workflow amount to consultation. The judgment indicates that such meetings are not enough merely because they include discussion of business conditions. The decision considered their actual subject matter and found there had been no discussion of likely redundancies or a restructuring affecting the applicant ([94]-[95]).
The Code reasoning may be relevant when the employer’s stated case is redundancy but it also invokes the Small Business Fair Dismissal Code. In this decision, the Commission treated the Code as inapplicable to the redundancy rationale advanced, particularly given the email’s express statement that the dismissal was not a reflection on performance ([98]-[100]).
The case does not establish that every dismissal by email is unfair, nor does it determine that a job cannot be genuinely redundant if duties continue to be done by others. Its conclusions were based on the statutory and award requirements and the evidence before the Commission. The judge’s comments about conveying dismissals in person were framed as a general observation, with possible exceptional circumstances identified ([112]).
The supplied judgment is dated 1 June 2020, with a correction notice dated 2 June 2020 and a later update shown as 18 June 2020. The supplied text contains no later judgments discussing or applying Goldberg. It is therefore not possible, from this source alone, to describe how later courts or Commission members have treated it.
The decision itself relies on earlier authorities and explains how they inform its reasoning. It adopts the consultation analysis from Consultation Clause in Modern Awards ([75]); applies the valid-reason formulation from Selvachandran ([102], [106]); agrees with the notification observations in Knutson ([112]); and applies the flexible approach to compensation in Hanson ([118]). Those are authorities the decision relied on, not evidence of later treatment of Goldberg.
For a research assessment of subsequent treatment, the source supplied here would need to be supplemented with later decisions. No claim about whether the decision has been followed, distinguished or questioned later can safely be made from the text provided.
The decision leaves the operational-requirements limb of s 389 unresolved. The Commission considered redistribution of duties could prima facie fit a redundancy example, but did not finally decide whether the applicant’s job was no longer required because the failure to consult was dispositive ([90]-[96]).
The redeployment question is also unresolved. The Commission expressly said it was unnecessary to determine whether redeployment would have been reasonable ([97]). Although it identified possible subjects for discussion, it did not find that reduced hours, a finance role or any other position was actually available.
The Commission did not find that pregnancy or the external home loan was the actual reason for dismissal. It said it understood why the applicant might believe that, but was not comfortably satisfied on the evidence that those were the reasons ([104]). The finding was instead that the employer had not established a valid reason and had failed to follow fair procedures.
Finally, the compensation figures should be read as recorded in the operative order, while recognising the apparent arithmetic discrepancy between the stated 9.5% superannuation component and the $247 ordered ([125], [127]). The supplied text does not explain whether the amount reflects a different calculation base or a separate correction.
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The applicant denied that Mr Hill had 'bent over backwards' to allow her to work three days a week from home. She denied Mr Hill having told her on 6 November 2019 that he had to rethink the (business) model and could not pay her annual leave in advance.
[49] In oral evidence, Ms Lloyd confirmed she first learnt of the applicant's redundancy from Mr Hill on 27 November 2019. He did not mention redundancy or major changes to the business in the previous 12 months. On 27 November 2019, he told her he was making the applicant's role redundant, because there was not a lot of work over December 2019/January 2020 and he did not want to pay for the quiet period when she was leaving in March anyway. He was also unhappy that the applicant had taken her loan external and away from the business. Mr Hill had never mentioned the business was struggling to acquire new clients.
[50] Ms Lloyd said the morning meetings were about files staff were working on and general discussion and questions of who, and what each staff member was working on. Ms Lloyd understood that the total business income for 2019 was higher than in 2018 and she had not been given the impression that there was insufficient work for the applicant in the business. Ms Lloyd believed that Mr Hill had multiple business bank account(s) to which income was received. Ms Lloyd believed that most of the business expenses appeared to be paid out of a different account to the business account.
[51] In cross examination, Ms Lloyd agreed that all the list of ~250 lost clients, she named only 3 who she believed remained clients (2 of which had changed their names). Ms Lloyd agreed she had updated the income each month and was aware that the business had not met its targets for 2019. She did not accept the business had no money despite Mr Hill consistently telling her so. He had not acted as if it had no money.
[52] Ms Lloyd acknowledged that a new IT system had been introduced and took some time to be transitioned. She agreed Mr Hill was not familiar with the IT systems. Ms Lloyd agreed the office environment was toxic and unbearable. However, Mr Hill was the person responsible for it. He had intimidated and threatened her when he had said to her on 7 December 2019 'don't get involved in the Fair Work case or it won't be good for you. You need to look after yourself'. She claimed Mr Hill would intimidate her if she did not agree with him and gave an example of when he told her to ring a client when he tried to hide an issue with her tax debt.
[53] Ms Lloyd rejected Mr Hill's claim that as the Director, he had to take decisive action. Though working for Mr Hill for eight years, Ms Lloyd said it was only in the last year that she had difficulty in coming to work each day. Ms Lloyd agreed that the business paid for her financial planning course and diploma and allowed her to work on it during work time.
[54] In oral evidence, Ms Coleman said the daily meetings were for the team to talk about the work for that day, set priorities for the week and to ask questions. Ms Coleman was not aware of major changes at the office which would affect employment and did not believe there was insufficient work for the applicant before she was dismissed. She believed there was a mortgage-based role for the applicant, as she had assisted her in this work in the past. Ms Coleman left the business in July 2019.
[55] In cross examination, Ms Coleman agreed that when she worked in the business, the office environment was not toxic or unbearable. She accepted there had been regular team meetings. It was Ms Coleman's recollection that the performance of the financial planning and mortgage broking business increased year on year in 2018 and 2019. She stressed she was not referring to targets. Ms Coleman understood the Hayne Royal Commission initially affected the mortgage broking industry. However, from her current experience, it had not affected the financial planning industry, although a number of reforms, including educational requirements, have since been extended. Major changes had been happening for five years.
[56] Ms Coleman believed the applicant was a capable learner. She would be well-positioned as a financial planner as she was studying for another degree. She confirmed the significant IT changes in the business during 2019, but she had had a minor involvement with the Xero system.
[57] Mr Hill made this final submission:
'Your Honour, the business employs less than five people. It has changed its business direction. It is clear that it was losing money or at least not achieving its targets. Everybody had access to the targets. The atmosphere was toxic, unbearable. We had the Royal Commission. We changed the entire IT system. There was lack of trust. There is quite a lot of accusations that speak for themselves. Something needed to be done, your Honour. I didn't have any other choice. Thank you.'
[58] In answer to a question from me, Mr Hill agreed that he had not provided audited financial statements, but believed all the evidence confirmed that the business targets were not being met.
[59] The applicant submitted that Mr Hill had not provided any evidence to demonstrate her dismissal was a genuine redundancy or that it was not harsh, unjust or unreasonable. Mr Hill had not established her evidence was false. The applicant pointed out that Mr Hill had not provided evidence of the financial state of the business, including of any recent or comparative business tax returns. His only attempt to do so was for income in one week (5 - 12 February 2020), which was after she was made redundant. He had not provided any details of a loss of clients and the lists he had provided had been inaccurate and misleading. The applicant submitted that, in any event, targets were not a condition of her employment contract. Further, Mr Hill had denied her bonuses. He had not properly consulted her, in accordance with the Code or the Award. Nothing had been discussed about changes affecting her employment. the regular morning meetings could not possibly meet the employer's consultation obligations under the Award. Nothing was put to her about the alleged poor financial state of the business and it wasn't performing poorly.
[60] The applicant rejected Mr Hill's claim that she had no desire to be a mortgage broker, as proven by her experience and qualifications. Further, Mr Hill had never mentioned he had distrusted her. He now criticises her, but had said her redundancy was not a reflection of her performance. While acknowledging the work environment was toxic, this does not excuse Mr Hill's unfair process in dismissing her. Mr Hill also had a lack of accountability for his legal obligations in respect to payslips and other conditions of employment. The applicant reiterated that she believed she was dismissed because of her pregnancy and moving her loan away from the business.
[61] In reply, Mr Hill expressed his concerns that all employees had access to his business records and client details, and he had a right to protect his business. Mr Hill said that he had not been able to pay employees their sick leave entitlements, but eventually did, because he thought the applicant and Ms Lloyd would 'walk out'. Employees had not been 'replaced', and his wife and son continue to help out the business. He did not believe consultation was necessary when someone accuses you of harassment, intimidation, and even sexual discrimination.
[62] Before considering the merits of this application, a number of preliminary matters must be determined, which also go to the respondent's two objections to the application. An unfair dismissal is defined in s 385 of the Act and is to be read in conjunction with s 396. The sections read as follows:
A person has been unfairly dismissed if the FWC is satisfied that:
(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.
396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
[63] At the outset, I make the following findings:
The applicant's unfair dismissal application was lodged within 21 days after her dismissal on 27 November 2019, as required by s 394(2) and satisfying s 396(a) above.
The applicant was dismissed at the initiative of the employer, as confirmed in the email to her of 27 November 2019 sub-s 385(a) and 386(1)(a).
The applicant was a person protected from unfair dismissal in that:
- she had completed the minimum employment period set out in ss 382 and s 383 of the Act, being a period of 4 years;
- a Modern Award applied to her employment; namely, the Banking Award (s 382(3)(b)(ii) of the Act).
The applicant's dismissal was a case involving the Code, as the respondent had 5 employees at the relevant time (s 385(c)).
[64] It is apparent that the respondent's primary objection is that the applicant's dismissal was a case of 'genuine redundancy' (s 385(d)). It was also put that the respondent had complied with the Code. If either of these objections are upheld, the applicant's unfair dismissal claim must be dismissed for want of jurisdiction. However, if both objections are dismissed, then the consequent step is for the Commission to consider and determine whether the applicant's dismissal was 'harsh, unjust or unreasonable', in accordance with s 387 of the Act, and, if so, what remedy should be ordered, pursuant to s 392 of the Act.
[65] The sections of the Act relevant to these objections are s 388 and s 389 as follows:
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person's dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person's employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
(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.
[66] The definition of 'genuine redundancy' is further explained by way of examples, in the Explanatory Memorandum at 1546 to 1553:
'1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.
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
1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer's operational requirements relate only to a part of the employer's enterprise, as this will still constitute a change to the employer's enterprise.
1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the
[67] It is apparent that a finding under s 389 of the Act is predicated on three matters:
- whether the person's job is no longer required to be performed, because of
I will deal with each of these matters in turn after setting out the principles which have been developed by this Commission and the Courts in respect to redundancy, consultation and redeployment.
[68] It is trite to observe that the meaning of the term 'redundancy' may vary, depending on the particular industrial context, and/or the text of an applicable industrial instrument. In Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10, Gleeson
'In the industrial context, redundancy of position is not a concept of clearly defined and inflexible meaning.'
[69] A Full Bench of this Commission in Construction, Forestry, Mining and Energy Union (CFMEU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU); "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Spotless Facility Services Pty Ltd t/a Spotless [2015] FWCFB 1162 said at [66]:
'[66] The meaning of the word 'redundancy' is not fixed and the term will take colour from its context. However, in any relevant context it is the abolition of a position which leads to that position being redundant. The cause of the abolition of the position - whether business restructure, technological advance, loss of contract/ordinary turnover or otherwise - is a separate matter, albeit one which may determine the entitlements of the redundant employee.'
[70] Further, in Hodgson v Amcor Ltd; Amcor Ltd & Ors v Barnes & Ors [2012] VSC 94,
Vickery J ('Hodgson v Amcor'), after summarising the relevant authorities, arrived at the
'In essence, subject to any qualification or re-statement found in the relevant contract of employment or any applicable statute, the common law concept of "redundancy" comes down to the following propositions:
(a) A job becomes redundant when the job of the employee ceases to exist because the employer, for whatever reason, whether by reason of reorganisation, mechanization, change in demand or other reason, no longer desires to have it performed by anyone;
(b) This can occur either when the role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists;
(c) However, redundancy is not limited to the circumstance where the employer, no longer desires to have the work previously performed by the terminated employee done by anyone;
(d) A redundancy may also arise upon the redistribution of job functions, where the duties performed by an employee are redistributed among other employees. In this case the employer still requires the duties to be performed, but the re-organisation may give rise to a redundancy. In this event, although the duties remain to be performed, "for all practical purposes the original role no longer exists" because the duties are divided and assigned amongst others. In such a case the question is whether any function or duty remains to be performed by the employee. A redundancy will occur if, after the reorganisation, the employee in question is left with no duties to discharge;and
(e) Redundancy will not arise where the termination of employment is carried out solely because of any personal act or default of the employee terminated or for any consideration peculiar to that employee'. (endnotes omitted)
[71] In Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488 ('Ulan Coal v Howarth'), a Full Bench of the Commission held at [19]-[20] that:
'[19] In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the "jobs" of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 nontrades mineworker positions which were surplus to the Company's requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.
[20] These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer's enterprise'
[72] The Full Bench in Ulan Coal v Howarth, after considering relevant authority and the
'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 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 (at 308):
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 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.'
[73] In Dibb v Commissioner of Taxation (2004) 136 FCR 388; [2004] FCAFC 126 ('Dibb') referred to above, the Federal Court said at paras 43 and 44:
'43. The difficulty in this case has been caused by the aphorism which appears in both paras 12 and 42 of TD 94/12 to the effect that the job, not the employee, becomes redundant. However s 27F speaks of the "bona fide redundancy of the taxpayer". We consider that it is more accurate to say that an employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by any employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant. Reallocation of duties within an organisation will often lead the employer to consider whether an employee, previously employed to perform specific functions assigned to a particular "job", will be able to perform any available "job" existing after such reallocation. Even if the employee's job, defined by reference to its duties, has disappeared, he or she may be able to perform some other available job to the satisfaction of the employer. In that case, no question of redundancy arises. It is only if the employer considers that there is no available job for which the employee is suited, and that he or she must therefore be dismissed, that the question of redundancy arises. If, in good faith, the employer:
then, for the purposes of s 27F, the employee is dismissed by reason of his or her bona
fide redundancy. In the above discussion we have used the word "available" as meaning "vacant", and the word "suitable" as meaning "within the employee's capacity".
44. In the present case, the employer redistributed the duties previously performed by
its District Managers and at the same time, added further duties. The job, described by reference to its duties as previously performed by Mr Dibb, ceased to exist. The employer no longer wished to have that job performed by anybody. The work was to be differently distributed. The result was that there was no job for which his skills qualified him. He was "surplus to [AVCO's] personnel needs". We consider that the respondent was in error in concluding that Mr Dibb's dismissal was not by reason of his bona fide redundancy. As a result, the respondent also erred in failing to address the matters prescribed by s 27F. These errors have inevitably deprived Mr Dibb of the benefit conferred by Subdiv AA upon a person receiving a bona fide redundancy payment as part of an ETP.'
[74] It would seem logical and understandable, that the Commonwealth Parliament considered the history of the meaning of redundancy, as expressed in the early authorities, when it crafted the statutory meaning used in s 389 of the Act.
[75] The meaning of the word 'consult', was considered by the Full Bench in Consultation Clause in Modern Awards [2013] FWCFB 10165. At [30]- [33], the Full Bench said:
'[30] The word 'consult' means more than the mere exchange of information. As Young J said in Dixon v Roy:
"The word 'consult' means more than one party telling another party what it is that he or she is going to do. The word involves at the very least the giving of information by one party, the response to that information by the other party, and the consideration by the first party of that response." [citations omitted]
[31] The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality. Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):
"... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party's views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to "consultation" has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto. To elaborate further on the ordinary meaning and import of a requirement to "consult" may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, "this is what is going to be done" and saying to that person "I'm thinking of doing this; what have you got to say about that ?". Only in the latter case is there "consultation. ..."
[32] We respectfully adopt his Honour's observations. Similar to the obligation to accord a person procedural fairness, the precise content of an obligation to consult will depend on the context. The extent and significance of a proposed change, in terms of its impact on the affected employees, will have a bearing on the extent of the opportunity to be provided. Hence a change of limited duration to meet unexpected circumstances may mean that the opportunity for affected employees to express their views may be more limited than would be the case in circumstances where the proposed change is significant and permanent. It is also relevant to note that while the right to be consulted is a substantive right, it does not confer a power of veto. Consultation does not amount to joint decision making.
[33] Some of the ordinary incidents of a requirement to consult are reflected in
[76] In Maswan v Escada Textilvertrieb t/a ESCADA [2011] FWA 4239 ('Maswan'), Watson VP held at [39]:
'[39] In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in the procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred.'.
[77] It is notorious that the word 'consultation', is arguably the most oft debated word in the industrial relations lexicon (perhaps, 'reasonable' being another). It has been the subject of considerable judicial and Commission exegeses. That said, it is important to note that despite the views of some uninformed litigants, consultation does not mean agreement. However, nor does it simply mean an exchange of information; nor is it a mere formality or triviality; see: Maswan above. Consultation must be meaningful, open, and transparent and involve a reasonable and realistic consideration of each other's views.
[78] For a relatively short jurisdictional point and straightforward unfair dismissal claim, there was a voluminous amount of material filed by both parties which was repetitive, and for the most part, a reflection of the one issue they all agreed on; namely, the toxic and unpleasant workplace environment that appeared to have commenced about a year earlier and accelerated in the few months before the applicant's dismissal. Mr Hill claimed the evidence of the applicant, Ms Lloyd and Ms Coleman, was spiteful, vengeful and a product of them collaborating to unfairly paint him in the worst possible light. The applicant, Ms Lloyd and Ms Coleman responded that they had only been telling the truth and Mr Hill had misled the Commission, was untruthful and loose with his own evidence. He selectively edited their evidence in an attempt to portray their comments as supporting his case, when it actually did the opposite, when read in full and in context.
[79] Of course, this case is not about some intensive investigation into Mr Hill's business and employment practices, however from my observation of Mr Hill in the proceedings and from his accusatory documentary material (bolded, unnecessarily highlighted, and repeated), in my view, Mr Hill had a propensity for exaggeration, hyperbole and implausible explanations and defences for inexplicable decisions. In short, he was not a convincing advocate of his own case.
[80] That said, it was obvious that the applicant's supporting witnesses are her friends and were plainly hostile to Mr Hill (whether for good reason, or otherwise, is not for me to judge), but they had plausible and believable reasons for resigning from the business, having experienced varying levels of similar conduct and attitude of Mr Hill which the applicant described. Of course, providing critical evidence about one's former employer, is usually far more cautious, restrained and circumspect than when evidence is provided by existing employees, whose future might not be so bright, after swinging the proverbial 'baseball bat' at their employer.
[81] On the other hand, in my opinion, the evidence of the applicant and her supporting witnesses, was not the product of collaboration between them. On an objective view, while the themes are the same, their statements and conclusions are not similar, as to demonstrate improper collaboration. Ms Coleman's reasons for resigning were different to Ms Lloyd. She had even said she was not angry with Mr Hill and did not hate him - she was just disappointed with how she and the applicant had been portrayed and treated by him. Moreover, Mr Hill was not able to shake the applicant or the support persons, who were in the stressful position of being questioned, in the witness box, by their former employer. Mr Hill did not discredit their evidence (although he was proud to claim he had) and I found them to be honest and straightforward witnesses, whose evidence generally had a 'ring of truth' about it.
Was the applicant's dismissal a case of genuine redundancy?
[84] As mentioned earlier, there are essentially three sub questions to s 389 of the Act, which must be satisfied for the jurisdictional objection to be sustained:
(a) Was the applicant's job no longer required to be performed by anyone because of the operational requirements of Mr Hill's business?
(b) Did Mr Hill comply with the consultation requirements of the Award in respect to the applicant's redundancy?
(c) Would it have been reasonable in all the circumstances to redeploy the applicant within the business, or an associated entity of the business?
[85] The applicant maintained that these three questions were not established by the evidence and therefore s 389 had not been satisfied and Mr Hill's objection could not be upheld.
[86] As the objector in this matter, the onus was on Mr Hill to provide cogent and reliable evidence of the financial difficulties he claimed were the reason for the applicant's redundancy. In the usual case, this will require the production, sometimes on a confidential basis, of the financial records of the business, including audited business tax returns, bank statements or a registered accountant's evidence of the state of the business finances and the like. On the state of the material relied on by Mr Hill, I cannot be satisfied that he has discharged this onus to the appropriate evidentiary standard.
[87] Making broad industry-wide generalisations and referring to media reports of the impact on the finance industry as a consequence of the Hayne Royal Commission, providing lists of client names with no supporting details, relying on a one-week snapshot from a single bank account and two single page loan account extracts, does not meet what is required to satisfy the Commission of the state of the business's finances. Mr Hill placed great emphasis on his claim that the business targets were not being achieved. However, this submission proves nothing about the actual state of the business's finances. Targets are not a tangible or reliable indicia of business profitability or otherwise. To demonstrate the obvious, an employer could set utterly unrealistic targets and because these targets were obviously not achievable, claim the company was not performing.
[98] Seemingly, in a desperate attempt to come up with any defensible explanation for the applicant's dismissal, Mr Hill relied on compliance with the Code as being a further jurisdictional objection.
[99] It is difficult to reconcile Mr Hill's 'genuine redundancy' objection with the Code, which is predicated on a dismissal for either misconduct or a person's capacity to do the job; noting the email of 27 November 2019 in which he stated the applicant's redundancy was not a reflection on her performance.
[100] As neither of these criteria applied to the applicant, even on Mr Hill's evidence, reliance on the Code simply cannot arise. Mr Hill's reliance on the Code is legally and conceptually misplaced. The Code objection is irrelevant and dismissed.
[101] I am satisfied that Mr Hill has not made out any jurisdictional objections, such as to disqualify the applicant from pursuing her unfair dismissal rights under ss 387 and 392 of the Act. It is to these matters which I now turn; firstly, as to a consideration of whether the applicant's dismissal was unfair, pursuant to s 387 of the Act. Section 387 reads as follows:
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.
[102] The meaning of 'valid reason' in s 387(a) is drawn from the judgement of Northrop J in Selvachandran v Peterson Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371 ('Selvachandran'). This meaning has been considered and applied by members of the Commission and its predecessors for many years. For example, in Rode v Burwood Mitsubishi Print R4471, a Full Bench of the then Australian Industrial Relations Commission ('AIRC') discussed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996, and by citing Selvachandran. The following is an extract from the Full Bench's decision at [17]-[19]:
'[17] In relation to the meaning of "valid reason" the following remarks of Northrop J in Selvachandran v [Peterson] Plastics Pty Ltd are relevant:
"Section 170DE(1) refers to a 'valid reason, or valid reasons', but the Act does not give a meaning to those phrases or the adjective 'valid'. A reference to dictionaries shows that the word 'valid' has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: '2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.' In The Macquarie Dictionary the relevant meaning is 'sound, just or wellfounded; a valid reason'.
In its context in s 170DE(1), the adjective 'valid' should be given the meaning of sound, defensible or wellfounded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must `be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC."
[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).
[19] We agree with the appellant's submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.
See also: Nettleford v Kym Smoker Pty Ltd [1996] IRCA 282; (1996) 69 IR 370.' (citations omitted)'
[103] All of the criteria in s 387 of the Act must be taken into account when the Commission considers whether a particular dismissal is unfair. The notion of 'taking into account' a matter (such as those described in s 387 of the Act) connotes a genuine consideration of the relevant section and the apportionment of the appropriate weight of each criterion in the circumstances. In Construction, Forestry, Mining and Energy Union v Hamberger and Another [2011] FCA 719; (2011) 195 FCR 74, Katzmann J pointed out that '[t]o take a matter into account means to evaluate it and give it due weight' and that 'mere advertence will not be enough'. That said, it must also be steadily borne in mind that all of these matters must be considered in totality. That this is so is obvious from the Explanatory Memorandum to the Fair Work Bill 2008 where at para 1541, it reads:
'1541. FWA must consider all of the above factors in totality. It is intended that Fair Work Act 2009 will weigh up all the factors in coming to a decision about whether a dismissal was harsh, unjust or unreasonable and no factor alone will necessarily be determinative.' (my emphasis)
Whether there was a valid reason for the applicant's dismissal (s 387(a))
[104] Given that s 387(a) as to 'valid reason' refers to 'a person's capacity or conduct', neither of which is advanced by Mr Hill in this case, then it would seem this factor is, at best, a neutral consideration. While the applicant believed that her dismissal was due to her pregnancy and Mr Hill's unhappiness with her moving a loan from the business, I am not comfortably satisfied based on the evidence that those were the reasons for her dismissal; although I can understand why she may believe it to be so.
[105] On the other hand, Mr Hill seems to have created a post-facto argument not properly articulated, developed or supported, that the working environment was so toxic and that the applicant's knowledge of, and access to his business records and clients, posed a risk to his business viability and reputation. This view does not sit well with the language and tenor of the 27 November 2019 email, in which he states the applicant's redundancy was not a reflection of her performance.
[106] In any event, to the extent this was a reason for the applicant's dismissal, it is not supported by evidence; merely assumptions. It is fanciful, prejudiced and not well founded; see: Selvachandran. In my view, there was no 'valid' reason for the applicant's dismissal.
Whether the person was notified of that reason (s 387 (b))
[107] The only time the applicant was notified of the alleged reason for her dismissal (redundancy) was when it was made effective by the 27 November 2019 email. If the other reasons referred to above were the real reasons, then the applicant was never notified of them. Either way, this factor tells in favour of a finding of unfairness.
Whether the person was given an opportunity to respond to any reasons related to her capacity or conduct (s 387(c))
[108] Similarly, this criterion relates to the conduct or capacity of the applicant and does not arise where the reason is for redundancy. Even accepting the reason of redundancy was a valid one, the applicant was given no opportunity to respond, and certainly had no opportunity to respond to any other unstated reasons at the time. This factor tells in favour of a finding of unfairness.
Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal (s 387(d))
[109] Given the applicant was given no warning of her dismissal, a request for a support person in meetings to assist in any discussion relating to her dismissal, is moot. This is a neutral factor in this case.
If the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal (s 387 (e))
[110] There is no evidence of any concern of the employer as to the applicant's performance, as he concluded in the 27 November 2019 email. This is also a neutral factor in this case.
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 managements specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal (s 387(f)-(g))
[111] Although I accept the respondent is a small business and has no dedicated human resource management expertise about procedures to be followed when effecting an employee's dismissal, it must be bluntly said that no employer with any sense of common decency, would have effected a dismissal in the hopelessly cavalier and perfunctory manner disclosed in this case. The dismissal was manifestly unfair. The respondent's approach in denying the applicant proper and fair procedures cannot be put down to mere naivety or ignorance. It was deliberate and calculated. Mr Hill has been in business for a long time and had employed a number of persons over this period. The size of the employer's business and lack of industrial relations expertise is no excuse for the lack of any fair procedure and the failure to comply with Award obligations in this case. It ill behoves any business person to treat an employee in the manner he treated the applicant. These factors tell in favour of a finding of unfairness.
Other relevant matters (s 387 (h))
[112] I have taken into account the applicant's period of service and her current limited prospects for future job opportunities as a consequence of the birth of her second child. These matters tell in favour of a finding of unfairness, based on harshness. The applicant was notified of her dismissal in an email from Mr Hill sent to her when she was on leave on 27 November 2019 (see [1] above). Not for the first time, have I had occasion to point out that informing an employee of their dismissal by phone, text or email, is an inappropriate means of conveying a decision, which has such serious ramifications for an employee. I consider it would only be in rare circumstances that a decision to dismiss an employee should not be conveyed in person. For example, it may be necessary where the employer believes a dismissed employee might be a threat to the safety of his/her employees, might pose a serious risk to Company property, or because the employee expressly did not want a 'face to face' meeting to hear the outcome of any disciplinary process. I agree with Commissioner Cambridge when he said in Knutson v Chesson Pty Ltd t/a Pay Per Click [2018] FWC 2080 at [47]:
'[47] The employer provided notification of dismissal by email communication sent at 8.53pm on 6 November 2017. Notification of dismissal should not be made by email communication. Unless there is some genuine apprehension of physical violence or geographical impediment, the message of dismissal should be conveyed face to face. To do otherwise is unnecessary callous. Even in circumstances where email or electronic communications are ordinarily used, the advice of termination of employment is a matter of such significance that basic human dignity requires that dismissal be conveyed personally with arrangements for the presence of a support person and documentary confirmation.'
[113] Pursuant to s 387 of the Act, and in light of the telling factors in favour of such a finding, I am satisfied the applicant's dismissal was 'harsh, unjust and unreasonable', both in substance and procedure. I turn now to remedy.
[114] Section 392 of the Act sets out the matters the Commission must have regard to when determining:
(b) if so, what amount of compensation should be ordered;
(c) the effect of any order on the viability of the respondent's enterprise;
(d) the effect of any order as to any findings of misconduct by the applicant;
[115] Section 392 reads as follows:
(1) An order for the payment of compensation to a person must be an order that
the person's employer at the time of the dismissal pay compensation to the person in
(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
(g) any other matter that the FWC considers relevant.
(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
(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
(5) The amount ordered by the FWC to be paid to a person under subsection (1)
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the
(6) The amount is the total of the following amounts:
(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.
[116] Section 390 of the Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation. The applicant does not seek reinstatement. I do not consider that reinstatement is appropriate in this case, given the appalling treatment of the applicant by the respondent. This finding leads to a consideration of compensation.
[117] The methodology to be adopted by the Commission in calculating compensation, having regard for each of the matters set out in s 392 of the Act (often referred to as the Sprigg formula), was considered by a Full Bench of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. t/a Ottrey Lodge [2013] FWCFB 431 ('Ottrey'); see also: Sprigg v Paul's Licensed Festival Supermarket (1998) 88 IR 21 and Ellawala v Australian Postal Corporation [1999] AIRC 1250. In Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Nurcombe [2017] FWCFB 429, the Full Bench said at [42]-
'[42] The correct approach to the assessment of compensation was summarised by the Full Bench in the recent decision in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries as follows (footnotes omitted):
"[16] The well-established approach to the assessment of compensation under s.392 of the FW Act, taking into account the matters specified in s.392(2), is to apply the "Sprigg formula" derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c) - that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:
'[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
'... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that
assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.'
[34] Lost remuneration is usually calculated by estimating how long the
employee would have remained in the relevant employment but for the
termination of their employment. We refer to this period as the
[17] The identification of this starting point amount "necessarily involves assessments as to future events that will often be problematic". Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee's misconduct and the application of the cap of six months' pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case."
[43**]** We would add to this that in quantifying compensation, it is necessary to set out with some precision the way in which the various matters required to be taken into account under s.392(2) (and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and quantified. That is to say, the way in which a final compensation amount has been arrived at should be readily apparent and explicable from the reasons of the decision-maker.' (footnotes omitted)
[118] In a more recent Full Bench decision, Hanson Construction Materials Pty Ltd v Pericich [2018] FWCFB 5960 ('Hanson'), it has been made clear that the Sprigg Formula is not to be applied in a rigid manner. At [39], the Full Bench said:
'[39] The strict application of the approach set out in Sprigg v Paul's Licensed Festival Supermarket (Sprigg), and endorsed in subsequent decisions, would yield an order that Mr Pericich be paid compensation of 1 weeks' pay. Sprigg is a useful servant, but is not to be applied in a rigid determinative manner. In deciding the amount of a compensation order the Act directs that the Commission 'must take into account all of the circumstances of the case' including the particular matters set out at s.392(2)(a) to (g).' (my emphasis)
Effect of the order on the viability of the respondent's business
[119] Given the order I propose to make, I do not consider that the order will adversely affect Mr Hill's business (s 392(2)(a)). There was no request for an order of compensation to be paid by instalments (see: s 393 of the Act).
[120] The applicant's service in the business was four years. This is neither a short nor a lengthy period of service.
[121] The applicant has not obtained alternative employment and is unlikely to do so until the end of the maternity leave she proposes to take.
[122] In accordance with other decisions of the Commission, including my own in Mt Pleasant v McCormick, and accepting Mr Hill's submission that the reason for her dismissal was redundancy, which he did not consult with her about, I conclude that a further period of two weeks, after the applicant had returned from leave and was due to return to work on 4 December 2019, would have been appropriate to comply with the consultation provisions in the Award.
[123] I make no deduction for contingencies and note the applicant was not entitled by statute (the National Employment Standards) to any redundancy pay based on service of at least eight weeks' pay, due to the enterprise being a small business. As there was no misconduct of the applicant, there is no deduction made on that score (s 392(3)). The order I intend to make contains no component by way of compensation for shock, distress, humiliation or other analogous hurt (s 394(4)).
[124] In applying the principle in Hanson, and in consideration of all of the circumstances of the case, I consider that the application of the Sprigg formula, produces an inappropriate and unjust outcome.
[125] I consider that an order of ten weeks' pay, plus 9.5% superannuation, should be made in this case.
[126] For the aforementioned reasons, I am satisfied the dismissal of the applicant by the respondent on 27 November 2019 was 'harsh, unjust and unreasonable', within the meaning of the Act, for which compensation should be ordered. Finally, s 381(2) of the Act, is a significant and overarching object of Part 3-2 and is expressed in these terms:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(b) to establish procedures for dealing with unfair dismissal that:
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.
Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95
[127] Pursuant to s 392 of the Act, I make the following orders:
The respondent is to pay the applicant the amount of $6,500 plus $247 in superannuation in respect to her unfair dismissal.
The amounts in Order 1 are to be paid within 21 days of today.
Proceedings in matter U2019/13275 are otherwise concluded.
Printed by authority of the Commonwealth Government Printer
Rachael Goldberg
The Advice Spot t/a The Advice Spot [2020] FWC 2671
(1995) 60 IR 304
(2004) 136 FCR 388
(1995) 62 IR 371
(1996) 69 IR 370
(2011) 195 FCR 74
(1998) 88 IR 21
The respondent was ordered to pay the applicant $6,500 plus $247 in superannuation within 21 days. The proceedings were otherwise concluded ([127]).
[82] While I can attribute and discount some residual resentment and colourful language from their evidence, on the key questions, I found their evidence to be consistent with how I found Mr Hill's conduct of his case. I would add that his cross examination of the applicant and the witnesses told me more about him, rather than his clumsy and 'smart alecky' selective attempts to discredit them - it was not at all persuasive.
[83] For these reasons, I did not find Mr Hill to be a credible witness. Where his evidence conflicts with the applicant and her supporting witnesses, it is their evidence which I prefer.
[88] The evidence of the applicant and Ms Lloyd and Ms Coleman, was that they had understood that the business income actually increased in 2019 from 2018, and in addition, Mr Hill had diverted business income to his personal accounts to fund expensive overseas holidays and to pay his wife and son for work they had not performed for the business. While I have no reason to doubt the beliefs of the applicant and her witnesses, this must be qualified by their own personal opinions of Mr Hill. Further, I do not consider the applicant's submissions as to the state of the business' finances to be supported by cogent or verifiable evidence. The applicant of course, could have sought the complete financial records of the business through a Notice to Produce, but given she was unrepresented, I acknowledge she was not familiar with the Commission's rules and procedures. In any event, she wisely focussed on the lack of consultation about her redundancy, to demonstrate that s 389 was not complied with. This was her best and most potent argument.
[89] That said, the Commission can only rely on the evidence which is provided by the parties and cannot advise a party how to run their case; let alone run it for them. It would be entirely improper for me, notwithstanding my misgivings about the state of the evidence, to effectively steer a party in a way that ensures they put their best evidentiary case forward. That is not to say that the Commission could not have taken steps to inform itself of the state of the respondent's finances (s 590 of the Act); however, this would have required the Commission to undertake a forensic analysis of the businesses' financial records. In any event, this case, as will be seen shortly, can be determined by a less time consuming and problematic route.
[90] In respect to s 389(1) of the Act, it would seem, at least from that part of Mr Hill's evidence, which was not challenged, that he has not replaced either the applicant, Ms Lloyd or Ms Coleman, that the jobs and functions they have performed have been distributed to a contractor, Mr Hill himself and maybe his wife and son.
[91] Despite my broader misgivings, this would prima facie, fit the example of redundancy as explained in the Explanatory Memorandum at [66] above.
[92] Turning then to consultation as required by the Award, the obligation on the employer is to consult with employees when a definite decision is taken to make major changes in its structure, which is likely to have significant effects on the employees. Such consultation requires notice to the employees, engagement with them through discussion about the introduction of the changes, the likely effects of the changes and measures to mitigate the adverse effects of the changes.
[93] On any objective analysis, none of these steps were undertaken by Mr Hill. It cannot be disputed that the definite decision to make the applicant's job redundant was made on 27 November 2019 in a meeting Mr Hill had with Ms Lloyd. The applicant was informed of the decision that day, by email while she was overseas on leave. There was no discussion with her, let alone a discussion of her likely termination, at any time prior to her proceeding on leave. There was no discussion with her after the 27 November 2019 email and she did not return to work.
[94] Mr Hill's contention was that the employees were not only aware of the state of the business's finances, but that it was discussed at regular morning meetings, and these meetings met the requisite consultation for the purposes of the Award. Such a submission is nonsense. Firstly, no definite decision in its proper context, was made at any time prior to the applicant's receipt of the 27 November 2019 email. That was the day of the definite decision and no steps were taken to consult with her before or after that date. It was fait accompli.
[95] Secondly, to suggest that regular morning meetings was consultation for the purposes of the Award is absurd - it is just usual, unexceptional business practice. There was no evidence of any discussion of the likelihood of redundancies, or even of any change in business focus requiring a restructure. I accept that these meetings were just as the applicant and her witnesses characterised them - commonplace pre-work discussions in a small office, about work allocation, weekly projections and updates of files and questions and discussion. To elevate such meetings to consultation about redundancy, flies in the face of logic and reality and, frankly, is a submission which is perverse and nonsensical.
[96] Accordingly, I am well satisfied that s 389(1)(b) of the Act has not been complied with. Axiomatically, the applicant's dismissal was not a case of genuine redundancy. Mr Hill's jurisdictional objection is dismissed.
[97] It is unnecessary, therefore, to determine whether it would have been reasonable to redeploy the applicant to another role in the business. For completeness, this consideration requires a genuine discussion about options, including maybe, reduced hours, working in a different finance field or any number of other innovative suggestions. As the 27 November 2019 email was the beginning and the end of any so-called 'consultation', including about redeployment, this statutory obligation was also not met by Mr Hill.