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[2018] FWC 7524
General information, not legal advice.
Fair Work Commission
2018-12-18
Original judgment source is linked above.
s.394 - Unfair dismissal
Application for an unfair dismissal remedy - whether dismissal was a genuine redundancy - jurisdictional objection dismissed - dismissal found to be unfair - reinstatement ordered.
[1] On 27 March 2018, Mr Sergey Kukalev (the Applicant) made an application pursuant to s 394 of the Fair Work Act 2009 (the Act) for a remedy in respect of his dismissal by Prosegur Australia (the Respondent).
[2] The application indicated that the Applicant was notified of his dismissal on 19 January 2018. The dismissal took effect on the same day.
[3] On 26 April 2018, the Respondent filed a response to the unfair dismissal application. In doing so, it raised a jurisdictional objection that being the Applicant's dismissal was a case of genuine redundancy.
[4] On 17 May 2018, the matter was listed for conciliation before a Fair Work Commission Conciliator but remained unresolved at the end of the conciliation.
[5] As the application was filed outside of the 21 day period within which to lodge an unfair dismissal application, the matter was listed for an extension of time jurisdictional hearing before Commissioner Bissett. The Commissioner granted the Applicant an extension of time within which to file his application and a Decision[1] and Order[2] were issued reflecting her decision of 6 August 2018. The matter was subsequently listed for hearing before me on 12 October 2018.
[6] The Applicant filed written submissions and witness statements with the Fair Work Commission (the Commission) on 20 September 2018. The Respondent filed written submissions and witness statements in reply with the Commission on 4 October 2018.
[7] At a Directions Hearing conducted on 25 September 2018, the Commission sought submissions from the parties as to whether the Commission should conduct either a conference (s 398) or a hearing (s 399) in relation to the matter. Taking into account the number of witnesses and the parties wishes, it was decided that a conference would be the most effective and efficient way to conduct the matter.
[8] At the Conference, the Applicant was self-represented and gave evidence on his own behalf. The Applicant also led evidence from Mr Krasandar Kulas, a former employee of the Respondent. The Respondent was represented by Ms Simone Caylock of Rigby Cooke Lawyers who was granted permission to appear pursuant to s 596 of the Act and who led evidence from Mr Peter Rice, the State General Manager Victoria and Tasmania of the Respondent.
[9] The Respondent is a cash in transit (cash logistics and cash processing) business which employs approximately 1000 employees nationally.[3] The Respondent has four branches in Victoria - Wodonga, Bendigo, Kensington and Clayton in which approximately 199 employees are collectively employed.[4]
[10] The Applicant commenced employment with the Respondent on 11 February 2013 on a casual basis as an Armoured Vehicle Officer (AVO) based at the Clayton branch. He accepted full-time employment as an AVO on 13 June 2013.[5] The Applicant also served a period of prior employment of 8 years with the Respondent which ended in his resignation during 2011 at which point his accrued entitlements were paid out. The two periods of service were discontinuous.
[11] The Applicant's conditions of employment on accepting full-time employment were set out in an employment agreement (Employment Agreement) dated 11 June 2013.[6] His employment was also covered by The Transport Workers Chubb Security Services Limited Armoured Vehicle and Other Operations (Victoria) Enterprise Agreement 2011-2014[7] (Enterprise Agreement).
[12] The Applicant was engaged on 38 hour week basis on a base hourly rate of $22.49 per hour at the time of his dismissal. His hourly rate increased to $23.59 per hour if he was rostered to act as a Crew Leader. He also received an "all purpose" flexible crewing allowance of $3.49 per hour and also a daily ATM allowance of $5.95 or $9.75 if rostered as a Crew Leader.[8]
[13] The Applicant suffered a work related injury deemed to have occurred on 6 April 2017 for which he made a workers compensation claim that was subsequently accepted.[9] The Applicant undertook modified duties from April 2017 until medically cleared to return to full duties from 20 November 2017.[10] While engaged on the basis of a 38 hour week, the Applicant routinely worked overtime hours in excess of his 38 ordinary hours. For the purpose of his workers compensation claim it was identified that in the 13 week period prior to the 6 April 2017 date of injury he worked an average of 48.83 hours per week.[11]
[14] In May 2017, the Respondent was advised that it was unsuccessful in winning a tender for the renewal of a major contract it held with ANZ. The transition of the ANZ contract to the successful tenderer (Linfox) occurred on 15 October 2017. The loss of the ANZ contract represented a 23% reduction in the Respondents revenue in Victoria.[12] The Respondent was, however, successful in securing an incremental increase in work through a Westpac tender in late 2017 which partially offset the loss of the ANZ contract.[13] Mr Rice estimated that the effect of the loss of the ANZ contract and the incremental increase in the Westpac work was that of a net loss of approximately 15% of work volume.[14]
[15] Mr Rice states that in the wake of the reduction in volume and revenue, the Respondent reviewed its labour requirements and cost structure nationally. This led to a decision to implement reductions in workforce numbers. There were 19 redundancies implemented nationally, four of which were in NSW and five of which were implemented in Victoria. Of those five redundancies in Victoria, one AVO position (the Applicant's) was made redundant at the Clayton Branch and one control room operator position was made redundant at the Kensington branch.[15]
[16] Mr Rice estimates that there are currently between 70-80 AVOs engaged in Victoria, of which approximately 35 are permanent full time AVOs. Of the 70-80 AVOs currently engaged in Victoria, approximately 60 are engaged in the Clayton and Kensington branches.[16] At the time of the Applicant's redundancy, the Respondent employed 10 full-time AVOs at the Clayton branch including the Applicant. Of those 10 AVOs, the Applicant was the second least senior in terms of length of service.[17] There were also at that time 12 casual AVOs employed at the Clayton branch.
[17] Mr Rice states that there was a net reduction of 15% in work volume as a result of the contract changes and that those reductions impacted proportionately across each of the Victorian branches in terms of workload. Mr Rice was however unable, based on his inquires, to explain why the Respondent reduced the number of AVOs in the Victorian branches by only one position out of approximately 70-80 AVOs of which 35 were permanent. Nor could he explain why only one position was made redundant in the Kensington branch, that of a control room operator, when there were some 40 AVOs employed in that branch.[18]
[18] The process of redundancy and selection of the Applicant for redundancy was, according to Mr Rice, carried out by his predecessor Mr Clyde Bainbridge-Robb who has since left the business.[19] Mr Rice further states there were no company records able to be located that revealed the basis of the Applicant's selection for redundancy. Nor were any records available that revealed the rationale for why only one AVO role at the Clayton branch was made redundant in Victoria. Nor were any Respondent records found or produced that detailed any specific organisational restructure implemented at the Clayton branch as a consequence of the Applicant's redundancy.[20]The following exchange on transcript is relevant:
"Deputy President During your search of company records, were you able to identify whether any consultation took place in relation to the dismissal of Mr Kukalev consistent with the terms of the enterprise agreement?
Deputy President: All right, so you can't say or give evidence that any consultation occurred?
Deputy President: Similarly, would it be fair to say that you're unable to give any evidence as to why Mr Kukalev's position was made redundant?
Deputy President: You're also unable to give any evidence as to the operational changes, or the operational restructuring, that might've occurred at the Clayton branch that accommodated Mr Kukalev's removal?
Deputy President: Right, so I'm being asked to accept that a decision was made nationally which has had, let's say, a differential impact within the various branches, correct?
Deputy President: No impact on Kensington from an AVO perspective?
Deputy President: Was there any impact on AVOs in Tasmania?
Deputy President: But there was one AVO position identified and that was a position at Clayton and having - that's correct?
Deputy President: That one position reduction reflected the stated decline in transport work?
Deputy President: As I said previously, I'm struggling to see how the removal of one AVO matches the stated decline in work. Can you elaborate at all?
Mr Rice: I can't elaborate on that, Deputy President. What I - just in looking at the raw numbers, what I would say is that the Victorian business is probably under-represented in the aggregate redundancies that were made at the time and that probably reflects the fact that we had more Westpac work than was held elsewhere.
Deputy President: But I asked you previously whether there was a similar impact across the branches and you said - even if that's correct, that Victoria was less impacted than the other states, wouldn't there have been a consequent impact on the other branches within Victoria?
Mr Rice: Yes, I don't - I can't elaborate on how the makeup was arrived at."[21]
[19] On 19 January 2018, the Applicant had completed his "run" and returned to the Clayton depot, had unloaded his truck and signed out. He was then met in the kitchen by Mr Bainbridge-Robb and Ms Gwen Pizzo (Security Manager).[22] After a brief conversation, the Applicant was advised that he was to be made redundant with immediate effect. According to the Applicant no explanation was provided to him as to the reasons for his redundancy. The Applicant was then given a letter confirming his redundancy (Letter of Redundancy)[23] and was escorted from the premises.[24]
[20] The Letter of Redundancy was, according to Mr Rice, prepared in a draft form by the former HR Director, Mr Richardson who had no involvement in the dismissal of the Applicant beyond the preparation of the draft letter which was provided to Mr Bainbridge-Robb.[25]
[21] In relation to the reasons for redundancy, the 19 January 2018 Letter of Redundancy relevantly states as follows;
With recent organisational review of various areas within Prosegur's Australian business and the subsequent restructure that has occurred, the decision has been made for your current position to be made redundant.
[22] The Applicant states that the meeting conducted with Mr Bainbridge and Ms Pizzo on 19 January 2018 was the only time he was spoken to regarding redundancy or potential redundancy. He states that he was not consulted in advance of that meeting nor were there any other meetings or consultation with employees regarding planned redundancies.[26] The Respondent adduced no evidence regarding the meeting with the Applicant on 19 January 2018 or any consultation undertaken with respect to the redundancies implemented in Victoria.
[23] The Enterprise Agreement includes a consultation term at clause 20 which states as follows:
(a) This term applies if;
(i) the employer has made a definite decision to introduce major change to production, program, organisation, structure, or technology in relation to its enterprise; and
(ii) the change is likely to have a significant effect on the employees.
(b) The employer must notify the relevant employees of the decision to introduce the major change.
(c) The relevant employees may appoint a representative for the purposes of the procedures in this term if:
(i) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and
(ii) the employee or employees advise the employer of the identity of the representative; the employer must recognise the representative.
(d) As soon as practicable after making its decision, the employer must:
(a) discuss with the relevant employees:
(i) the introduction of the change; and
(ii) the effect the change is likely to have on the employees; and
(iii) measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and
(b) for the purposes of the discussion provide, in writing, to the relevant employees:
(i) all relevant information about the change including the nature of the change proposed; and
(ii) information about the expected effects of the change on the employees; and
(iii) any other matters likely to affect the employees.
(e) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.
(f) The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.
(g) If a term in this Agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in subclauses (b), (c), (d) and (e) are taken not to apply.
(h) In this term, a major change is likely to have a significant effect on employees if it results in:
(i) the termination of the employment of employees; or
(ii) major change to the composition, operation or size of the employer's workforce or
(iii) to the skills required of employees; or
(iv) the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
(iv) the alteration of hours of work; or
(v) the need to retrain employees; or
(vi) the need, to relocate employees to another workplace; or
(v) the restructuring of jobs.
In this term, relevant employees means the employees who may be affected by the major change[27]"
[24] The Enterprise Agreement also includes a Redundancy Agreement at Appendix 5 which is expressed to apply to "Victorian Road Crew". It was not contested that the terms of the Redundancy Agreement applied to the Applicant. The Redundancy Agreement includes provisions dealing with the "process" including consultation and order of retrenchment and relevantly states as follows:
Refers to any employment/engagement being terminated in which the number of employees exceeds the number who will be required to perform the work which is available or because the employer no longer wishes the job the employee has been doing be done by anyone.
It is a decision to be made by management after consultation with members of the Union.
Any of the following factors may operate to reduce the amount of work which is available;
(1) A recession caused by a decline in trade or business opportunities
(2) Technological change or changes in the method of operation; and
(3) A cessation of a requirement, by the Company, to have any particular kind of work performed by its employees.
The parties to this agreement are committed to maintaining and developing employment opportunities.
Should it become apparent that a redundancy situation will arise in a depot, consultation shall take place with delegates and officials of the Union on the transfer of employees to similar suitable alternative positions within the Company at another depot. As far as practicable the Company shall provide at least 4 weeks notice of the need for redundancies.
Should redundancies be necessary following consideration of the above factors then in the first instance the Company shall call for volunteers. In the event of the number of volunteers exceeding the positions to be made redundant then priority shall be given to the most senior employees (i.e. senior in terms of years of service).
In the absence of any sufficient volunteers then retrenchment shall occur on the basis of the last on/first off rule.
Provided that, at all time the Company reserves it's right to maintain the most suitable mix of vehicles, attributes and skills and these factors shall take priority over the selection of volunteers or the application of last on/first off.
[25] The Applicant received a redundancy payment which comprised seven weeks pay in lieu of notice, a 12 week redundancy payment and pay-out of accrued leave.[29] This resulted in a gross payment of $30,614.49 which was reflected in the Applicant's termination pay slip.[30]
[26] The Respondent has continued to recruit casual AVOs since the Applicant's dismissal[31], including five new AVOs at the Clayton branch. This has been in part to cover casual AVOs that had been "on the books" but were no longer available for shifts. Mr Rice also states that the Respondent's continued reliance on casual AVOs is driven by the Respondent's growth strategy which is aimed at automated cash management solutions. This, according to Mr Rice, affects labour requirements and the Respondent's ability to recruit full-time AVOs and requires an increasingly flexible workforce in terms of rostering.[32]
[27] Since the Applicant's redundancy, there has been a reduction to seven from ten permanent full-time AVOs at the Clayton branch. The reduction is explained by the Applicant's redundancy, one full-time AVO transferred to a part-time AVO role and one full-time AVO was promoted to a supervisory role. At the same time, the number of part-time AVOs has increased from two to three, while the number of casual AVOs engaged has increased from 12 to 13.[33] No full-time AVOs have been employed in Victoria since the Applicant's dismissal, apart from a casual AVO at the Kensington branch transferred to a full-time AVO position at the Bendigo branch on 19 February 2018 and one casual AVO at the Bendigo branch transferred to a full-time AVO position at that branch on 19 March 2018.[34]
[28] Mr Rice states that in addition to the redundancies implemented, other measures have been taken by the Respondent since he commenced in the role of State General Manager Victoria and Tasmania on 13 May 2013. Those measures include:
(i) Reduction of excessive leave balances through expunging unchecked RDO accruals[35]; and
(ii) Virtual elimination of contractors used to supplement the Respondent's AVO hours.[36]
[29] Subsequent to the Applicant's redundancy, he underwent surgery on 23 January 2018 for a non-work related medical condition. As a consequence of that procedure and his subsequent recovery, he was certified by medical practitioners as unfit to perform any work until 19 March 2018.[37]
[30] On his recovery from the medical procedure, the Applicant sought alternate employment which he secured on a casual basis with IBS Security Services (IBS) as an armed guard/security officer commencing on 16 April 2018. As at the date of hearing, the Applicant remained employed on a casual basis on a rate of $26.50 per hour with IBS. According to the pay slips provided by the Applicant, in the period from 16 April 2018 until 23 September 2018, he earned gross wages of $22,917.80 from his employment with IBS. [38]
[31] I am required by s 396 of the Fair Work Act 2009 (Cth) (the Act) to decide four matters before I consider, if required, the merits of the application. There is no dispute between the parties and I am satisfied on the evidence that:
(a) the application was made within a period beyond the 21 day statutory time frame allowed by the Commission pursuant to s 394(3) of the Act;
(b) the Applicant was a person protected from unfair dismissal; and
(c) the Respondent was not a "small business employer" as defined in s 23 of the Act. As such the Small Business Fair Dismissal Code is not relevant in the matter.
[32] I will now turn to consider whether the Applicant's dismissal was a case of genuine redundancy.
[33] Section 389(1) of the Act sets out the meaning of genuine redundancy and relevantly states as follows:
(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"
[34] Section 389(2) of the Act provides for an exclusion to that which would otherwise fall within the definition of genuine redundancy and relevantly states as follows:
"(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."
Was the Applicant's job no longer required - s 389(1)(a)?
[35] I turn first to consider whether the Respondent no longer required the Applicant's job to be performed by anyone because of the operational requirements of the Respondent.
[36] A Full bench considered the meaning of the term "genuine redundancy" in Ulan Coal Mines Limited v Henry John Howarth and others[39](Ulan) and relevantly stated as follows:
[17] It is noted that the reference in the statutory expression is to a person's "job" no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves "a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees' organisation, to a particular employee" (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
"What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant..." (at p.308)
This does not mean that if any aspect of the employee's duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the "job" of that employee no longer exists.
[18] In Kekeris v A. Hartrodt Australia Pty Ltd Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
"When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a 'genuine redundancy' where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists." [40](references omitted)
[37] It follows from the Full Bench's reasoning in Ulan and the summary of relevant cases cited in their decision that:
(i) A job is a collection of functions, duties and responsibilities assigned to a particular employee within an organisation;
(ii) The functions, duties and responsibilities may cease to be part of an employee's job through a reorganisation or redistribution of duties;
(iii) Should there no longer be any functions or duties to be performed by a particular employee, then his or her job ceases to exist;
(iv) The fact that the tasks and duties previously performed by an employee may have survived and been reallocated to other employees through a restructure does not mean the job is still required; and
(v) An employee's dismissal may be a genuine redundancy even though particular functions, duties and responsibilities previously performed by that employee are being performed by other employees.
[38] Mr Rice's evidence, which I accept, is that the Respondent lost a major contract (with ANZ) in late 2017 and while some incremental work was secured that partially offset the loss of the ANZ contract, the net reduction in work volume and revenue across the Respondent's operations nationally and in Victoria was approximately 15%. I also accept Mr Rice's evidence that a redundancy program was implemented in response to the work and revenue decline. That program resulted in 19 persons being made redundant nationally (including the Applicant) out of a workforce of approximately 989 at the time of the Applicant's dismissal. Of those 19 redundancies, five occurred in Victoria. That reduction represents a 1.9% reduction in national staff levels flowing from the net reduction in work of 15%. I accept the evidence of Mr Rice that other measures have also been implemented by the Respondent in response to the business decline, although his evidence failed to adequately explain why there was not a more pronounced and proportionate reduction in staff levels across each of the Victorian branches reflecting the stated business decline.
[39] Mr Rice also gave evidence that due to the Respondent's business strategy, it requires a more flexible workforce and referred to the continued employment of casual AVOs at the Clayton branch, while permanent full-time AVO numbers in the Clayton branch have declined from ten to seven since the Applicant's dismissal.
[40] A few things can be said about the evidence of Mr Rice. Firstly, Mr Rice was not employed by the Respondent until May 2018 and was unable to give any direct evidence of the redundancy program or the operational restructuring undertaken at the Clayton branch. Beyond the raw numbers and positions that were made redundant, Mr Rice was unable to establish through his internal inquiries and provide any evidence regarding the process or rationale for the particular redundancies implemented, including that of the Applicant.
[41] What Mr Rice was able to confirm was that of the four branches in Victoria, which he states were equally impacted by the work and revenue decline that flowed from the ANZ contract loss, only one AVO position was made redundant, that of the Applicant in Clayton. No AVO positions were removed in the Kensington, Bendigo or Wodonga branches, although the redundancy of the control room operator position had an indirect impact on AVO numbers in the Kensington branch, according to Mr Rice. Unhelpfully, Mr Rice was unable to reconcile why, if the loss of the ANZ contract impacted equally across the Victorian region, there were no other AVO positions made redundant in the other branches. Furthermore, Mr Rice was unable to shed any light on the nature of the operational restructure implemented at the Clayton branch that resulted in the Applicant's dismissal, beyond referring to the numbers of permanent AVOs and casuals that continued to be employed.
[42] There are some significant tensions in the position advanced by the Respondent regarding the Applicant's redundancy. While there was a reduction in the Respondent's business volumes flowing from the loss of the ANZ contract, the impact of that reduction does not appear to have been uniformly felt across the Respondent's Victorian branches. In fact, aside from one control room operator position at Kensington, there was no evidence of any other reductions in "transport roles" i.e. AVO positions in Victoria. This was also at odds with Mr Rice's evidence regarding the strategy of the Respondent requiring a more flexible workforce, vis a vis, the use of casuals. If that was the business strategy, one would have expected to see other branches similarly impacted by a reduction in permanent AVO positions and a proportionate increase in casuals.
[43] Nevertheless, while the Respondent failed to adduce evidence regarding the operational restructure implemented in the Clayton branch, I do accept that the Respondent implemented several redundancies across its Victorian operations in response to the business downturn. I am also satisfied that the Respondent has reduced the number of permanent AVO positions in the Clayton branch through a combination of the Applicant's redundancy and the subsequent transfer of two employees into different roles. It can be reasonably concluded, despite the unsatisfactory nature of the Respondent's evidence, that the number of permanent AVO roles in the Clayton branch has been reduced and that the duties formerly undertaken by the Applicant have been absorbed into the remaining team of permanent and causal AVOs.
[44] The Applicant not surprisingly took issue with his selection for redundancy and claimed that it was due to his 2017 workers compensation claim. Although the Applicant sought to draw that inference there was no evidence to support that assertion. As regards the Applicant's selection, that issue is not relevant for the purpose of my consideration of s 389(1) of the Act. As made clear at paragraph 1553 of the Explanatory Memorandum, the issue of an individual's selection for redundancy is not a matter that goes to determining whether the redundancy is genuine. The Explanatory Memorandum relevantly states:
"Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal."[41]
[45] It follows from the above, and I am satisfied that, the permanent AVO role previously held by the Applicant is no longer required by the Respondent due to changes in the Respondent's operational requirements. I now turn to consider whether the Respondent complied with its consultation obligations.
Did the Respondent comply with any consultation obligations - s 389(1)(b)?
[46] It is clear that the Enterprise Agreement imposes obligations on the Respondent to consult in respect of redundancy situations with "members of the Union", its delegates and officials. Those obligations which are found at Appendix 5 of the Enterprise Agreement are not contested by the Respondent.
[47] Separate to the consultation obligations detailed in Appendix 5, there are also consultation obligations prescribed in Clause 20 of the Enterprise Agreement. The interaction of Clause 20 with Appendix 5 was not raised in the proceedings. It may well be that there is an argument that the specific consultation obligations under clause 20 are displaced in the circumstances of redundancies by reason of the operation of clause 20(g). It is unnecessary, however, for me to determine the application of clause 20 in the present matter given the obligations detailed in Appendix 5.
[48] The Applicant gave unchallenged evidence that there was no consultation with respect to his redundancy. He also gave evidence that there were no other discussions in the workplace that he was aware of that addressed his redundancy situation. I accept the Applicant's evidence.
[49] The Respondent failed to adduce any evidence in reply as to either the decision making process that led to the Applicant's dismissal or consultation that may have taken place with respect to the Applicant's redundancy situation. The fact that the apparent decision maker, Mr Bainbridge-Robb, left the organisation following the redundancies being implemented is no answer to the lack of records regarding the program of redundancies and whether any consultation took place. It also beggars belief that the now departed HR Director, Mr Phillip Richardson, who prepared the Applicant's Letter of Redundancy in a draft form for Mr Bainbridge-Robb had, according to Mr Rice's inquiries, no knowledge of or involvement in the process of determining or implementing the Applicant's redundancy.
[50] The absence of any records or evidence reflects poorly on the Respondent and invites a conclusion that, at best, its record keeping was shoddy or more likely having regard to the Applicant's evidence, no consultation occurred. I favour the latter explanation and am not satisfied on the evidence that the Respondent met its consultation obligations under the terms of the Enterprise Agreement.
[51] It follows from my conclusions above that despite the Respondent no longer requiring the Applicant's job to be performed, its failure to consult in accordance with the Enterprise Agreement means that the Applicant's dismissal was not a genuine redundancy. As such it is unnecessary for me to consider s 389(2) of the Act. The Respondent's jurisdictional objection that the Applicant's dismissal was a genuine redundancy is dismissed.
[52] Having concluded that the Applicant's dismissal was not a case of genuine redundancy, I now turn to consider the merits of the application.
[53] An order for reinstatement or compensation may only be issued where I am satisfied that the Applicant was protected from unfair dismissal at the time of the dismissal.
[54] Section 382 of the Act sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal:
"382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
Note: High income threshold indexed to $142,000 from 1 July 2017.
[55] There is no dispute, and I am satisfied, that the Applicant has completed the minimum employment period, and is covered by a modern award. Consequently, I am satisfied the Applicant was protected from unfair dismissal. I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the Act.
[56] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:
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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388."
[57] In this case, having found that the Applicant's dismissal was not a genuine redundancy, the matter to now be determined is that element contained in subsection 385(b) of the Act, specifically, whether the dismissal of the Applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable:
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."
[58] I am required to consider each of these criteria in reaching my conclusion.[42] I will now consider each of the criteria at s 387 of the Act separately.
Was there a valid reason related to the capacity or conduct of the Applicant- s.387(a)
[59] A valid reason for the dismissal of the Applicant need not be the reason given to the Applicant at the time of the dismissal.[43] The reasons should be "...sound, defensible and well founded"[44] and should not be "...capricious, fanciful, spiteful or prejudiced."[45]
[60] I am satisfied that the Applicant's dismissal was due to redundancy, albeit as I have already found above it was not a "genuine redundancy". The Applicant was not dismissed for a reason related to his capacity or conduct.
[61] In the circumstances of this case the absence of a valid reason related to his capacity or conduct is a neutral consideration.
[62] While the Applicant was notified of the reason for his dismissal, that of redundancy, it was not a "valid reason" related to his capacity or conduct. It follows that he was not notified of a "valid reason". In the circumstances of the present case, however, where the dismissal was due to redundancy it is a neutral consideration.
Opportunity to respond to any reason related to capacity or conduct - s.387(c)
[63] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.[46]
[64] The Applicant was self-evidently not given an opportunity to respond to the reasons for his dismissal relating to his conduct or capacity. In the circumstances of the present case, however, where the dismissal was due to redundancy, it is a neutral consideration.
[65] The unchallenged evidence of the Applicant as to the lack of prior notice and the perfunctory nature of the dismissal meeting might suggest a request by the Applicant for a support person would have been pointless. However, there was no evidence adduced that a support person was requested or unreasonably refused in the meeting on 19 January 2018. This criterion is consequently a neutral consideration.
Warnings regarding unsatisfactory performance - s.387(e)
[66] The Applicant was not dismissed for performance shortcomings as he was made redundant. Consequently, this factor is a neutral consideration in my decision.
Impact of the size of the Respondent on procedures followed - s.387(f)
[67] The Respondent's Form F3 - Employer Response indicates that at the time of the Applicant's dismissal it employed 989 employees. There is no evidence before me that establishes that the Respondent organisation's size impacted on the procedures followed by it in dismissing the Applicant. This factor is therefore a neutral consideration in my decision.
Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)
[68] The evidence in this matter indicates that the Respondent had access to the services of a dedicated human resources specialist employed by the Respondent. This factor is therefore a neutral consideration in my decision.
[69] The Applicant submits that a number of additional matters are relevant to determining whether his dismissal was harsh, unjust or unreasonable including:
(i) The dismissal was harsh having regard to his recovery from his worker's compensation injury just prior to his dismissal;
(ii) His request just prior to his dismissal for a month off to accommodate his planned medical procedure due to be performed on 23 January 2018;
(iii) The Applicant's age and combined length of service of 13 years from the two discreet periods of service with the Respondent.
[70] The Respondent submits in reply that there a number of other matters that need to be considered that militate against a finding that the Applicant's dismissal was harsh, unjust or unreasonable. These include the following:
(i) The Applicant's job no longer existed as a consequence of the restructure of the AVO roles at the Clayton branch.
(ii) The fact that the Applicant's job was no longer required constitutes a valid reason that was "sound, defensible or well founded" and not "capricious, fanciful, spiteful or prejudiced"[47].
(iii) In the 8 months since the Applicant's dismissal, the Respondent has not employed any new AVOs in Victoria apart from the two AVOs at Bendigo both of whom moved from casual to permanent status.
(iv) Redeployment was not reasonable in the circumstances for reasons including that there were no suitable permanent vacancies at the time of the Applicant's dismissal at the Clayton branch or any other Victorian branch.
(v) It would not have been reasonable to redeploy the Applicant to a casual role.
(vi) Given the Applicant's redundancy was a part of a national program, any consultation regarding the transfer of the Applicant to a different role would have had no practical utility.
(vii) Had the Respondent sought volunteers pursuant to Appendix 5, Clause (b)(ii), and had there not been any volunteers in the Clayton branch, the Applicant would have been selected on the basis of last on/first off as he was the least senior of the permanent AVOs at the Clayton branch.
(viii) In any case, the Respondent reserved its rights under the terms of the Redundancy Agreement to "maintain the most suitable mix of skills".
[71] The Respondent submits in summary that their failure to consult, if found, was not fatal. This is so, the Respondent says, as consultation would have been unlikely to have negated the operational reasons for the dismissal or led to a substantive change. In making this submission, the Respondent refers to the reasoning of Vice President Watson in Maswan v Escada Textilvertrib T/A Escada[48](Escada) as adopted by Senior Deputy President Kaufman in UES (Int'l) Pty Ltd v Leevan Harvey (UES).
[72] There a number of problems with the submissions made by the Respondent, not the least of which is the almost complete absence of evidence. Apart from the Respondent's business circumstances and the number of AVOs employed in the Clayton branch at the time of the Applicant's dismissal and currently, almost no other relevant evidence was adduced.
[73] The Respondent makes the submission that the same outcome would have arisen had it engaged in consultation, that being the redundancy of the Applicant. That submission appears to be based on the presumption that the decision making process that led to the Applicant's dismissal was "sound defensible and well founded". The difficulty is that there is simply no evidence to support that submission, as is evident from Mr Rice's concessions that he had no knowledge or information relevant to the selection of the Applicant. While the Respondent concedes that it does not know on what basis the Applicant was selected for redundancy, it maintains that the same outcome would have resulted if a proper process of consultation had been implemented. That submission has no merit in my view.
[74] It is also the case that despite the Respondent's submission, the Applicant was not the least senior permanent AVO in the Clayton branch at the time of his dismissal. Mr Rice in his evidence concedes that the Applicant was the second least senior AVO in the Clayton branch at that time of his dismissal.
[75] As regards there being no other permanent AVO roles in the Clayton branch, I accept that there were no other roles in the Clayton branch but there were two permanent AVO positions filled in the Bendigo branch in the two months following the Applicant's dismissal. No evidence was adduced, however, by the Respondent as to when those vacancies arose, what processes were followed in filling those roles or whether any consideration was given to the Applicant.
[76] As regards the submission that it would have been inappropriate to transfer the Applicant into a casual role, the simple fact is that the Respondent did not even raise that as an option with the Applicant. Perhaps he would have rejected a casual role, or when confronted with the alternative of redundancy, it may have held some appeal for him. In any event, the option was not canvassed at the time of the Applicant's dismissal, when on the Respondent's own evidence; they continued to recruit casual AVOs for the Clayton branch.
[77] The Respondent's submission regarding the lack of utility of consultation seems to wholly miss the point of consultation, and that is to afford an opportunity to employees and/or their representatives to explore and present alternatives to mitigate the impact of the proposed redundancy. The Respondent's failure to consult in the circumstances of this case is a significant factor that weighs heavily against a finding that the dismissal was not unfair.
[78] As regards the Respondent's reliance on UES and Escada, their attempt to characterise the circumstances in the present matter as similar is misconceived. In both of those cases, the relevant employers had presented evidence as to the rationale for the operational restructure and the selection of the particular individuals for redundancy, although in both cases there were failures in terms of consultation. It is useful to provide the reasoning of the Vice President in Escada when he considered s 387(h) matters:
"[36] Most of the relevant factors fall into this category. In my view it is clear that the company conducted a restructure of its Australian operations and decided to merge the two positions of Regional Manager and Retail/Marketing Manager. Mr Maswan was not considered appropriate for the merged role. I do not consider that this conclusion was unreasonable. As one incumbent had resigned and the other incumbent was not considered suitable, it was reasonable to seek to recruit a person suitable for the role. Once a good candidate was identified it became almost inevitable that Mr Maswan's employment would need to be terminated.
[37] The failure to notify and consult with Mr Maswan in accordance with the award is a serious defect in the procedure. If the outcome of consultation was less predictable the failure to consult over proposed changes could render the termination unfair. However, the decision to terminate appears to be rational and justified. Clearly Escada needed a strong performer with all of the requisite skills in the merged role in order to turn around a poor trading history. It did not consider that Mr Maswan was that person. It found a good candidate who accepted the offer of employment. It therefore made the business decision to make Mr Maswan's position redundant and terminate his employment for that reason. It advised him of the reason, but not until it was in the process of implementing his termination.
[38] Payments were made in accordance with the Act and the Award and an additional amount of 2 weeks pay in lieu of notice was given. There was some delay in paying the redundancy pay which is not explained in the evidence. It appears that the obligation to make the payment was not known to Hong Kong management at the time. However it does not follow that redundancy is not the real reason for termination. The restructuring and the merger of positions are clearly established as the true reasons for dismissal.
[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 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 as 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."(emphasis added)
[79] The circumstances of Escada can be clearly distinguished from the present case in that there was simply no rationale provided for the decision to select the Applicant in the present matter, unlike Escada. Given the absence of evidence as to the rationale, I cannot be persuaded that, had there been consultation, the same result was inevitable. In my view, the outcome of consultation was not predictable despite the Respondent's claims to the contrary.
[80] Having considered the various matters raised by the Respondent, as part of my consideration on s 387(h) of the Act, I have concluded that a number of these matters weigh strongly in favour of a finding that the Applicant was unfairly dismissed. My reasons for this are as follows:
(i) There was no consultation regarding the Applicant's redundancy.
(ii) There was no evidence adduced as to the rationale for the Applicant's selection for redundancy such that I could be persuaded that consultation would not have negated the outcome.
(iii) The Applicant was not the most junior permanent AVO in the Clayton branch and had redundancy, in the absence of volunteers, been implemented on the basis of last on/first off, it does not follow that he would have been selected on that basis.
(iv) No evidence was adduced by the Respondent to persuade me that the Applicant would have inevitably been selected for redundancy had the Respondent exercised its "reserved right" to maintain the "most suitable mix of vehicles, attributes and skills...". The absence of any evidence as to the skills and capabilities of the Applicant relative to other permanent AVOs in the Clayton branch is telling.
(v) No evidence was adduced by the Respondent as to any measures taken by it to mitigate the impact of the redundancy in terms of considering the Applicant for any alternate permanent or casual roles within its Victorian branches, including at Clayton.
[81] Having weighed each of the criteria above, to the extent that they are relevant, I have concluded that the termination of the Applicant's employment was unjust and unreasonable. I have reached this conclusion having particular regard to the matters considered under s 387(h) of the Act. Of particular significance is the absence of any rationale for the Applicant's selection for redundancy and the lack of consultation regarding his dismissal on the grounds of redundancy.
[82] As a consequence of my findings above, I am satisfied that the Applicant was unfairly dismissed.
[83] The Applicant seeks reinstatement to his former position; an order to maintain the continuity of his employment; and an order that the Respondent pay him the remuneration lost since his dismissal. In the alternative, the Applicant seeks an order for compensation.
[84] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation:
"390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person's reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies."
(1) An order for a person's reinstatement must be an order that the person's employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person's employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person's employment;
(b) the period of the person's continuous service with the employer, or (if subsection (1A) applies) the associated entity.
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(3) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement."
[85] I have already dealt with the issues at s 390(1)(a)-(b) of the Act above. I am satisfied that the Applicant was protected from unfair dismissal pursuant to s 382 of the Act and the Applicant was dismissed unfairly. Accordingly, I am required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if I am satisfied such an order is appropriate in all the circumstances.
[86] Regardless of the remedy sought by the Applicant, s 390 of the Act requires I first determine whether reinstatement is appropriate before I may consider whether an order for compensation is appropriate.
[87] The Applicant seeks reinstatement as the primary remedy due to his age and his need for a secure income due to his having recently entered into a mortgage on a property that he purchased. While the Applicant understood that there had been a reduction in work, he rejected the Respondent's argument that the reduced number of permanent AVOs at the Clayton branch should act as a barrier to his reinstatement.
[88] The Respondent led no evidence as to there being any loss of trust and confidence in the Applicant. Nor was it contended by the Respondent that the return of the Applicant to the workplace would be difficult or embarrassing. The Respondent submits that the reinstatement of the Applicant was inappropriate for a number of reasons including:
(i) The Applicant received a generous redundancy payment;
(ii) The reasons for the Applicant's dismissal, that being a restructure of the Respondent's operations, and that the Applicant's role no longer exists;
(iii) There are no current permanent full-time AVO role vacancies within the Respondent's operations and there have been only two permanent AVO positions created in the business since the Applicant's dismissal, those being in the Bendigo branch;
(iv) It is not appropriate to return the Applicant to a casual position on terms less favourable than those he was on at the time of his dismissal;
(v) The Applicant secured alternate employment within a short period of time after his dismissal; and
(vi) The restoration of the Applicant to his former role would result in other employees being adversely impacted in terms of available hours of work.
[89] When s.390(3) of the Act was recently considered by the Full Bench in Tenterfield Care Centre Limited v Wait[49] (Tenterfield), it was said:
"[14] Subsection 390(3) underscores the primacy of reinstatement as a remedy for an unfair dismissal as the discretion to order a remedy of compensation may only be exercised if the Commission is satisfied that reinstatement is 'inappropriate'. Further, one of the objects of Part 3-2 of Chapter 3, in which the unfair dismissal provisions appear, is 'to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement'. We would observe that to describe reinstatement as the 'primary remedy', is to simply recognise that reinstatement is the first, perhaps even the foremost, remedy under the Act. The relevant question in determining whether to grant the remedy of reinstatement of an employee in relation to a dismissal that is found to have been 'unfair' is whether reinstatement is appropriate in the particular case.
[15] The general principles concerning consideration of whether the remedy of reinstatement should be granted were dealt with in the Full Bench decision in Nguyen
v Vietnamese Community in Australia. Relevantly, the Full Bench determined that:
• whether to order a remedy is a discretionary decision;
• reinstatement might be inappropriate in a range of circumstances, including that it would be futile, or the employee was incapacitated by illness or injury, or because of a loss of trust and confidence;
• 'trust and confidence' is that which was necessary to make an employment relationship workable;
• trust and confidence is not the sole or even a necessary criterion for reinstatement;
• in relation to a contention of a loss of trust and confidence, each case had to be decided on its own facts; and
• an allegation of a loss of trust and confidence must be soundly and rationally based.
[90] As I have previously found, there was no evidence adduced as to the rationale for the Applicant's selection; the Applicant was not the least senior full-time AVO in the Clayton branch who would have been retrenched had the last on/first off mechanism been applied; no performance or conduct issues were raised; and there was no evidence as to the Applicant's skills and capabilities relative to his peers. Nor do I accept that it was inevitable that the same outcome, i.e. the Applicant's selection for redundancy, would have arisen had the Respondent undertaken appropriate consultation.
[91] I place weight on the following factors that are supportive of the Applicant's reinstatement; his two separate periods of employment with the Respondent totalling 13 years; his stated intention to remain with the Respondent until his retirement; the absence of evidence or contentions as to the Applicant having any performance or conduct issues; and that no issues of trust and confidence have been raised by the Respondent. These factors weigh strongly in favour of an order of reinstatement.
[92] The Respondent in reply has raised a number of matters that go to the practicality, utility and consequence of reinstatement. They cite the restructure of the operations of the Clayton branch; the continued reduction of permanent AVO roles in that branch; the absence of any current full-time AVO position vacancies; the impact of reinstatement of the Applicant on other employees' hours of work; and the redundancy payment received by the Applicant as particular circumstances weighing against reinstatement.
[93] I find the Respondent's submissions without merit for the following reasons.
[94] The fact that the Respondent secured alternate employment in a relatively short period of time reflects well on the Applicant's attempts to mitigate his losses. However, the work secured by the Applicant with IBS Security is on a casual basis. I also note that his average weekly earnings with IBS Security are also significantly less than his prior average earnings inclusive of overtime with the Respondent. I am not persuaded that the Applicant's success in obtaining alternate employment is a factor that would make reinstatement inappropriate, particularly where such alternate employment is on a casual basis.
[95] The organisational restructure of the Respondent's operations in Victoria which resulted in the Applicant's dismissal was limited to a reduction of one position in the Clayton branch. While I have accepted that the Applicant's job is no longer required, it is also the case that the Respondent has continued to engage casual employees in the Clayton branch. Furthermore, no evidence was adduced by the Respondent as to the hours of work that casual employees engaged in the Clayton branch are currently working. I am not persuaded in the absence of evidence that the structure of work in the Clayton is such that reinstatement of the Applicant would be impractical.
[96] While I accept the evidence of the Respondent that there are no current permanent AVO roles available within its Victorian operations there was no evidence adduced by the Respondent as to the impact the Applicant's reinstatement would have, particularly having regard to the Respondent having realised a further reduction of two permanent AVO positions in the Clayton branch, which is below the number of AVO positions originally pursued through its operations restructure implemented in January 2018. I am not persuaded that the restructure of work implemented by the Respondent in January 2018 and its reallocation of work to casual employees is a barrier to the reinstatement of the Applicant.
[97] I am also not persuaded that the impact of the Applicant's reinstatement on other employees (i.e. casual employees) is a relevant factor in circumstances where no evidence was adduced by the Respondent as to the hours of work currently performed by casual employees in the Clayton branch. While it would seem logical that the Applicant's reinstatement would result in a reduction of at least 38 hours per week for the pool of casual employees at the Clayton branch, the Respondent failed to support their submission with any evidence as to what extent the pool of casual employees would be impacted. In these circumstances I am not persuaded that the potential impact on those other employees is a barrier to reinstatement.
[98] I am also not satisfied that the issue of the redundancy payment received by the Applicant means that reinstatement would be inappropriate. It may however be a relevant factor for consideration of ss 391(2), (3) & (4) of the Act.
[99] The Respondent has not advanced a compelling case in support of its submission that reinstatement is inappropriate. No issues of trust and confidence arise and there are, in my view, no other factors raised that would make reinstatement inappropriate. Having considered all of the circumstances, I have concluded that reinstatement is not inappropriate. I consequently intend to order reinstatement. Such reinstatement must be to a position on terms no less favourable than those on which the Applicant was employed immediately before his dismissal.
[100] I now turn to consider other matters under s 391 of the Act relevant to my order for reinstatement.
[101] Having determined that an order for reinstatement is not inappropriate, I may also make orders, if considered appropriate, to maintain the continuity of the Applicant's employment[50] and for lost remuneration[51]. In considering an order for lost remuneration, I must take into account the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of an order for reinstatement[52] and earnings likely to be earned during the period between the making of the order for reinstatement and actual reinstatement.[53]
[102] In determining whether an order to maintain the continuity of the Applicant's employment is appropriate, I have had particular regard to the circumstances of the Applicant's dismissal. It is not a case where the Applicant was dismissed for a valid reason related to his capacity or conduct and where there were deficiencies in the process that rendered the dismissal unfair. Rather, it was a case in which, against a backdrop of a 15% reduction in the Respondent's business, the Applicant was seemingly forensically selected from a pool of some 70-80 AVOs in Victoria, 35 of whom were permanent employees. The rationale for the Applicant's selection as the sole AVO to be retrenched in Victoria was not provided by the Respondent. Nor could it explain why no other branch in Victoria or Tasmania was similarly "restructured" as the Clayton branch was following the stated business decline. It is hard to envisage a redundancy program more poorly executed, at least in terms of the manner implemented with respect to the Applicant. These failings were compounded by a lack of company records that might have otherwise revealed the rationale and process of selection of the Applicant.
[103] Against the background that I have briefly summarised and having regard to my earlier findings regarding the Applicant's dismissal being unfair, I am satisfied that it is appropriate that the Applicant's continuity of employment be maintained on reinstatement. The Applicant should not be subject to the penalty of loss of continuity of employment by reason of the Respondent's failures.
[104] I turn now to consider whether restoration of lost pay is appropriate. For the same reasons referred to above at [102], I do not believe that it is appropriate that the Applicant should suffer a loss of remuneration for reasons of the Respondent's failures. I consequently intend to consider what if any payment should be made for lost remuneration. In doing so, I must consider income earned from other employment. In the circumstances of this case, it is necessary for me to take into consideration the income earned by the Applicant from his casual employment with IBS Security and the redundancy payment received by him.
[105] The Applicant's pre-dismissal weekly remuneration with the Respondent based on his ordinary hours of 38 hours per week is calculated as $1,016.99, plus superannuation. I have calculated this figure based on the Applicant's base hourly rate of $22.49 plus the "all purpose" flexible crewing allowance of $3.49 per hour and also the daily ATM allowance of $5.95. No evidence was adduced as to the incidence of the Applicant being rostered as a "crew leader" which would have attracted a higher rate. Consequently, I have made the calculation based on the Applicant's base AVO rate.
[106] From the date of the Applicant's dismissal to the date of this decision is approximately 48 weeks. I accept on the basis of medical certificates provided by the Applicant in these proceedings that the Applicant was unfit for any work for an eight week period from 19 January to 19 April 2018 due to a medical procedure for a non-work related medical condition. I therefore conclude that had he remained employed by the Respondent, he would have received income for a 40 week period up until the date of this decision. Based on the above figures of $1016.99 per week, I am satisfied that it is likely that the Applicant will have suffered a loss of remuneration of $40,679.60. I note that this figure is conservative in that it is based on 38 ordinary hours of work per week which the Applicant routinely worked well in excess of.
[107] The Applicant received a redundancy payment which comprised seven weeks pay in lieu of notice, a 12 week redundancy payment and pay-out of accrued leave. This resulted in a gross payment of $30,614.49.[54] I do not believe it is appropriate to include the statutory leave component in the calculation of earnings. Deducting that amount of accrued annual leave of $8,270.56 results in a net termination payment figure of $22,343.93. He has also earned income in the period from 16 April to 23 September 2018 of a gross amount of $22,917.80.[55]
[108] While it may be inferred that the Applicant will have continued to work on a causal basis up until the date of this decision and orders, I have no evidence of that and do not intend to take that into account. Therefore the total earnings in the period for the purpose of s 394(4)(a) of the Act is $45,261.73.
[109] I also must consider income "reasonably likely" to be earned between the making of the order for reinstatement and actual reinstatement. Based on the income earned by the Applicant in his employment with IBS, I am satisfied that the Applicant is "reasonably likely" to earn some income during the period between the making of the order for reinstatement and actual reinstatement. The Applicant's gross earnings for the 22 week period from 16 April to 23 September 2018 based on his supplied IBS pay slips was $22,917.80. That results in average weekly earnings of $1041.72 for that period. Based on the order I intend to issue that the Applicant be reinstated within 14 days, I find that it is "reasonably likely" that the Applicant will earn $2083.43 in the period between the making of the order for reinstatement and actual reinstatement.
[110] I am satisfied that earnings for the Applicant since his dismissal up until his reinstatement will be that of $47,345.16.
[111] Having regard to the Applicant's earnings since his dismissal and estimated lost remuneration, I do not believe it is appropriate to make an order pursuant to s 391(3) for lost remuneration.
[112] I am satisfied that the Applicant's dismissal was not a genuine redundancy. I am further satisfied that the Applicant was protected from unfair dismissal and that his dismissal was unfair.
[113] I have found that reinstatement is not inappropriate and have determined to issue an order that the Applicant be reinstated to a position on terms no less favourable than those on which the Applicant was employed immediately before his dismissal. Such order must be complied with within 14 days of the date of this decision.
[114] An order giving effect to this decision will be separately issued with this decision.
[1] Sergey Kukalev v Prosegur Australia Pty Limited [2018] FWC 4408.
[3] Exhibit R2, Witness statement of Mr Peter Rice, dated 4 October 2018, at paragraph [1].
[6] Exhibit A3, Chubb Security Services - Change to employment status document, dated 11 June 2013.
[9] Exhibit R7, Workers Compensation Claim Decision, dated 5 May 2017.
[10] Exhibit A10, Medical Certificate dated 20 November 2017.
[23] Exhibit A4, Notification of Redundancy, dated 19 January 2018.
[30] Exhibit R6, "Prosegur Weekly" pay slips.
[31] Exhibit R2 at paragraph [25], Exhibit A6, Seek advertisement, dated 31 January 2018.
[32] Exhibit R2 at paragraph [32]-[33].
[38] Exhibit A16, Applicant pay advice slips from IBS Security Services.
[41] Fair Work Bill 2008 Explanatory Memorandum at paragraph 1553.
[42] Sayer v Melsteel [2011] FWAFB 7498.
[43] Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359 at 373, 377-378.
[44] Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.
[46] RMIT v Asher (2010) 194 IR 1, 14-15.
[47] Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.
[50] s 391(2)(a) Fair Work Act 2009.
[52] Ibid s 391(4)(a).
[53] Ibid s 391(4)(b).
Printed by authority of the Commonwealth Government Printer
Sergey Kukalev
Prosegur Australia [2018] FWC 7524
(1995) 60 IR 304
(1931) 45 CLR 359
(1995) 62 IR 371
(2010) 194 IR 1