Is it unfair dismissal? Employer argues there was genuine redundancy
The Fair Work Commission (FWC) examined whether a head chef's dismissal was harsh, unjust or unreasonable after the employer abolished the position from its organisational structure due to business and financial challenges.
The employer objected to the application on the basis that it said the dismissal was a result of a genuine redundancy and was consistent with the Small Business Fair Dismissal Code.
The applicant contested these objections and sought a remedy from the Commission in respect of unfair dismissal. The applicant was engaged by the employer as its head chef for two years and nine months until his employment was terminated.
Employer dismissed objections relating to genuine redundancy
The FWC conducted a hearing to determine those objections and dismissed them for reasons delivered on the transcript.
The objection that the dismissal was consistent with the code and thus cannot be an unfair dismissal was dismissed on the basis that, as is well established, the code is not applicable to a dismissal arising from redundancy.
The objection that the dismissal was a genuine redundancy was dismissed because while the FWC determined that the employer made an operational decision to remove the position of head chef due to business challenges, the employer did not consult with the applicant in accordance with its obligation to do so pursuant to the award.
The FWC noted it was therefore necessary to determine the merits of the application. Having had the benefit of written materials filed by both parties and after hearing further evidence and submissions at the hearing, the FWC suggested to the parties that the merits of the matter might be determined on the papers after both parties filed further written submissions.
Neither party objected to that course of action, and both parties filed further written submissions in accordance with directions.
Employer made operational decision to remove head chef position
The employer submitted that the circumstances of the applicant's dismissal, arising as it did because the business decided to abolish his position of head chef from its organisational structure, constituted a valid reason for his dismissal.
The FWC noted it is well established that in order to be a valid reason, the reason for the dismissal should be sound, defensible or well founded and should not be capricious, fanciful, spiteful or prejudiced.
The FWC observed that while the manner in which the employer terminated the applicant's employment was lacking, the reason for the dismissal was valid.
It explained that the decision to remove the head chef position was due to the employer's business and financial challenges.
The FWC noted while the applicant said the business still engages several chefs, it accepted that the unique position of head chef which has particular duties and attracts a particular rate of remuneration is no longer used by the business.
Applicant not notified of reason before decision was made
The FWC emphasized that, while valid, the reason for the applicant's dismissal did not relate to capacity or conduct. The FWC therefore determined this was a neutral factor in its consideration as to whether the dismissal was harsh, unjust or unreasonable.
The FWC noted that notification of the valid reason for dismissal must be given to the employee explicitly and in plain and clear terms, and crucially, this must occur before the decision to terminate the employment is made.
In mid-May, a discussion occurred between the owner and the applicant, which occurred because a complaint had been made by the owner's wife, who worked in the venue, about the applicant's behaviour.
The discussion also canvassed some of the pressures the business was facing and changes that could be made to the business to deal with those pressures, such as reducing hours in the kitchen when there were fewer patrons in the venue.
The employer submitted that this amounted to consultation about the eventual redundancy of the applicant's position.
However, the FWC determined this was not so—it was not said explicitly that there was a likelihood or even a possibility that the applicant's role as head chef might be made redundant in this discussion.
Applicant told of dismissal upon returning from overseas
In the general manager's evidence, he said he had a conversation in late July with the owner in which he said the owner stated the employer was no longer in a position to support and continue the applicant's role as head chef because of the continuing and sustained downturn in trade.
At this time, the applicant was absent from work as he was travelling overseas due to his father's ill health. The applicant returned from overseas the next day.
The general manager contacted him by text and then spoke with the applicant in the afternoon on the phone and told him in this conversation that the role of head chef would immediately cease and that the role had been terminated effective immediately.
Thus, the FWC noted the applicant was not notified of the reason for his dismissal before the decision to terminate him was made—on the employer's own evidence this decision was made one day and the applicant was told the next day.
The FWC explained that the requirement that the Commission consider whether the employee was notified of the reason for their dismissal refers to the valid reason in relation to their capacity or conduct.
The FWC observed that the reason for the applicant's decision did not relate to his capacity or conduct, and so while he was not notified of it before the decision to terminate his employment was made, this was a neutral factor in its consideration.
Applicant not given opportunity to respond before decision
The FWC noted an employee protected from unfair dismissal should be notified of a reason for the termination of their employment relating to their capacity or conduct before a decision is taken to terminate that employment, so that they can provide a response before the decision is final.
The FWC emphasized that, as it had observed, the applicant was told of his dismissal after the decision had been made, and thus anything he may have said by way of response could not have impacted on the decision that had been made.
The general manager said the conversation he had with the applicant, in which he told him his employment was dismissed, was terminated abruptly by the applicant.
The general manager said he later sent a text message to the applicant in which he said to talk further when he reached home.
The applicant responded, asking for a written copy of the reasons for his termination, which were sent to him. The employer submitted that in this way the applicant refused to engage in further discussion and that, thus, what it said was a consultation process was truncated as a result of the applicant's attitude and actions rather than by its own failure to consult.
Size of business does not excuse abrupt termination
The FWC stated it would deal with this submission further but it did not change the fact that the applicant was not provided with an opportunity to respond to the reason for his dismissal before the decision was made.
Again however, the FWC clarified this consideration related to a valid reason about capacity or conduct and was thus a neutral consideration in the present circumstances.
The FWC noted no submissions were made about the matter of business size by either party. The FWC acknowledged that it was the case, however, that the employer was not a large business.
However, the FWC emphasized it did not consider that this excused the abrupt manner of the termination of the applicant's employment. The FWC explained that the decision to make his role redundant occurred while the applicant was overseas, and he was not consulted about it.
It observed the news was thrust upon him the day of his return from overseas after nearly three years of employment.
The FWC noted a rather forlorn attempt was made to attempt to contact him afterwards. The FWC concluded this seemed to be a rather shoddy way in which to treat an employee of several years standing.
The FWC determined that the size of the business or the absence of internal specialist expertise did not justify this treatment.
FWC determines failure to consult weighs in favour of unfairness
The FWC stated that while not a valid reason relating to the applicant's capacity or conduct, the reason for the decision to dismiss his employment was defensible and well-founded and based on an operational decision driven by a genuine financial pressure on the business.
The FWC noted it was appropriate to take this into account, and it did so, observing this weighed against a finding that the termination of the applicant's employment was unfair.
The FWC added in addition to the other matters, it may often be appropriate to take into account the failure to consult with an employee whose employment is terminated as a result of redundancy in determining whether the termination was harsh, unjust or unreasonable.
The FWC noted as it had mentioned, the employer submitted that the applicant's own conduct truncated its attempt to consult with him.
The FWC concluded this submission lacked merit. The FWC emphasized the employer did not consult with the applicant about his dismissal—consultation cannot occur when the decision has already been made, and in this case, the first mention of redundancy occurred after the decision had been made, when there was no longer any prospect the decision could be changed by feedback obtained through discussion.
The FWC observed that, so far as the applicant terminated a conversation or refused to talk further, it seemed he was likely upset about having found out about the sudden end of his employment in the way he did.
FWC determines dismissal was harsh, unjust and unreasonable
The employer submitted that it was well established that a finding of dismissal was not a case of genuine redundancy, which does not automatically lead to a conclusion that the dismissal was unfair.
The employer's submission of a conclusion of unfairness may be unjustified if the employee's own conduct truncated the consultation.
It also made submissions about what it described as the futility principle, suggesting that a finding of unfairness may not be justified when redundancy would have occurred, whether or not there was a failure to consult.
It also submitted that weight in favour of a conclusion of unfairness might be limited where there was at least some attempt to consult, submitting that was the case in the matter.
The FWC stated it had considered these submissions and accepted the proposition that simply because it had determined the dismissal of the applicant's employment was not a genuine redundancy did not mean it was necessarily unfair.
However, it emphasized it did not agree that the unfairness of the applicant's dismissal was tempered by the proposition that some consultation was attempted.
The FWC explained that the evidence did not show any attempt to consult the applicant before the decision was made.
The FWC clarified the efforts to talk to him were not consultation—they were to simply convey the decision that had been taken. The FWC concluded that whether consultation would have changed the decision was not the point—the failure to consult was itself unfair.
FWC orders compensation of two weeks pay plus superannuation
The FWC determined that, having considered each of the matters specified in the Act, it considered the termination of the applicant's employment was harsh, unjust and unreasonable.
It emphasized this was particularly because of the failure to consult with the applicant about the redundancy of his role and the abrupt manner in which he was told about it upon only just having returned from overseas.
The FWC concluded the applicant was unfairly dismissed. The FWC noted the applicant did not seek reinstatement and his role at the employer was redundant. The FWC observed he had been fortunate enough to find another job. The FWC determined in these circumstances that reinstatement was inappropriate.
The FWC assessed its evaluation as to the applicant's anticipated period of employment as likely to be extremely minimal, as his role was made redundant. The FWC explained that even if his employment had been terminated fairly, which it was not, it would not have continued long past this time because the role no longer existed.
However, the FWC clarified the employer was obliged to consult with the applicant and should have done so when it said it conducted a review leading to the redundancy of the applicant's position.
It noted an appropriate amount of time for such a process to occur, taking into account the nature and size of the business, was two weeks.
The FWC observed this may have meant that the applicant was provided with notice of termination of employment from a date two weeks later not the actual date, after which time he would have either been provided with notice or paid in lieu of notice.
The Commission determined that, taking into account the considerations, it considered the calculation of compensation, it intended to order the employer to pay the applicant.
The FWC concluded the amount was two weeks pay plus superannuation, considering this level of compensation appropriate having regard to all the circumstances of the case.
