Small Business Fair Dismissal Code and unfair dismissal

“Initial matters to be considered

 

  • Section 396 of the Act sets out four matters which I am required to decide before I consider the merits of Mr Munro’s unfair dismissal application.

 

  • There is no dispute between the parties and I am satisfied on the evidence that:

 

  • the application was made within the period required in s 394(2) of the Act;

 

  • Mr Munro is a person protected from unfair He completed the minimum employment period when he was a full time employee of Ballina Toyota for about 10 months in 2022 and he was covered by the Vehicle Repair, Services and Retail Award 2020 (Vehicle Award) during his employment with Ballina Toyota; and

 

  • the Small Business Fair Dismissal Code does not apply because Ballina Toyota is not a small business within the meaning of the Act.

 

  • As to the fourth initial matter which I am required to consider, there is a dispute between the parties regarding whether Mr Munro’s dismissal was a genuine redundancy. I will address this issue first.

 

 

Genuine redundancy

 

  • Section 389 of the Act defines genuine redundancy as follows:

 

389 Meaning of genuine redundancy

 

  • A person’s dismissal was a case of genuine redundancy if:

 

  • 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
  • the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

 

  • 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:
    • the employer’s enterprise; or

 

  • the enterprise of an associated entity of the

 

  • ‘Associated entity’ has the meaning given by s 50AAA of the Corporations Act 2001 (Cth).

 

The employer no longer required the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise (s 389(1)(a))

 

General principles

 

  • It is necessary to determine whether Ballina Toyota no longer required the job of Mr Munro to be performed by anyone because of changes in the operational requirements of Ballina Toyota’s enterprise.1

 

  • A job involves ‘a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee’.2 Where there has been a reorganisation or redistribution of duties, the question is whether the employee has ‘any duties left to discharge’.3 If there is no longer any function or duty to be performed by that person, their job becomes 4 For example, an employer may redistribute all the tasks done by a particular person between several other employees or outsource the tasks to a third party, resulting in the person’s job no longer existing.
  • An employee’s job may still be genuinely made redundant when there are aspects of the employee’s duties still being performed by other employees.5 The test is whether the job previously performed by the employee has survived the restructure or downsizing, not whether the duties have survived in some form.6

 

  • The reference to ‘changes in the operational requirements of the employer’s enterprise’ in s 389(1)(a) of the Act includes circumstances where an employer restructures its business to improve efficiency, productivity, sales, revenue or some other aspect of performance. The operational circumstances of a business which may give rise to a redundancy will reside in the

direct knowledge of the employer. The evidentiary onus is on the employer to provide direct evidence about the nature of the employee’s job and why it is no longer required to be performed as a result of changes in the operational requirements of the employer’s enterprise.

 

  • If a dismissal is found to be a genuine redundancy within the meaning of the Act, issues such as unfair selection procedures for redundancy are not relevant, because they go to the merits of the claim that the applicant was dismissed harshly, unjustly or unreasonably.7

 

Relevant facts

 

  • On 21 June 2021, Mr Munro commenced employment with Ballina Toyota as a casual employee in the position of Parts Storeperson/Delivery Driver. Mr Munro remained working for Ballina Toyota as a casual employee until he became a full time employee, in the position of Parts Interpreter, on 19 February 2022. Mr Munro worked in that full time position until 11 December From 12 December 2022 until 17 November 2023, Mr Munro was employed by Ballina Toyota as a casual employee in the position of Parts Storeperson/Delivery Driver. The change from full time employment to casual employment in December 2022 was made at Mr Munro’s request, because he wanted more flexibility while he was studying his Certificate IV in Work, Health and Safety.

 

  • I accept Mr Schmitt’s evidence that, after completing his studies in May 2023, Mr Munro informed Ballina Toyota that he was actively seeking work in his new desired field and he intended to leave Ballina Toyota by the end of 2023 or sooner if he was able to find a job. Mr Schmitt informed Mr Munro that Ballina Toyota would advertise for a full time replacement for Mr Munro and the business would get Mr Munro to assist in training the new employee.

 

  • In July 2023, Ballina Toyota started advertising for a full time position in its Parts

 

  • In about September 2023, Mr Munro informed Mr Schmitt that he intended to resign towards the end of December Mr Munro contends that Mr Schmitt asked him if he could remain ‘on the books’ and work one to two days per week in January 2024 while Mr Munro searched for full time employment so that Mr Schmitt could take some time off to use his annual leave. Mr Schmitt denies that he made such a request to Mr Munro. Mr Schmitt contends that Mr Munro made this request of him but he did not agree to it. I prefer Mr Schmitt’s evidence in relation to this contested conversation. Mr Schmitt did not take any annual leave in December or January 2024. Further, the evidence does not suggest that there was any business case supporting such an ongoing role for Mr Munro in January 2024; much would depend on sales in the balance of the year and whether a full time Parts Interpreter was found and employed.

 

  • On 25 September 2023, Ballina Toyota employed Mr Brendon Manning as a full time Parts Interpreter. Mr Manning resigned on 11 October 2023 because he was offered a mechanical apprenticeship at another workshop. Mr Munro was involved in training Mr Manning during his short period of employment with Ballina Toyota.

 

  • Shortly after Mr Manning resigned, Ballina Toyota again advertised for a full time Parts Interpreter and continued to run those advertisements until it employed a person in that role in mid-December 2023.

 

  • I accept Mr Schmitt’s evidence that in the months leading up to 17 November 2023, Mr Schmitt spoke with Mr Munro, on an informal basis, on a couple of occasions about how quiet it had been in the Parts However, Mr Schmitt did not suggest to Mr Munro that his position may be made redundant.

 

  • On Friday, 10 November 2023, Mr Munro was suffering from bad He called Mr Schmitt to let him know that he could not come to work on that day.

 

  • Between Monday, 13 November 2023 and Friday, 17 November 2023, Mr Munro called Mr Schmitt each morning to tell him that his headaches were continuing and he would not be able to work. Mr Munro spoke to Mr Schmitt on 13, 14, 15 and 17 November 2023. On 16 November 2023, Mr Schmitt was absent from work, so Mr Munro spoke with Mr Nathan Clifford, General Manager, to inform him that he was ill and could not come to work.

 

  • Mr Munro did not see a doctor in respect of his illness from 10 to 17 November 2023. He did, however, speak with his mother, who is a nurse, and his mother gave him advice, from her own experience as a sufferer of migraines, on how to deal with the headaches. Mr Munro followed his mother’s advice.

 

  • On 17 November 2023, Mr Schmitt recommended to Mr Thompson and Mr Clifford that Mr Munro’s employment be terminated on the grounds of redundancy. I accept Mr Schmitt’s evidence that he had previously floated the idea with Mr Thompson and Mr Clifford but no decision had been made until 17 November 2023.

 

  • Mr Thompson made the final decision to terminate Mr Munro’s employment on the basis that his casual position was no longer required. The reasons given by Mr Schmitt for recommending this decision and Mr Thompson for making this decision were as follows:

 

  • In the months leading up to 17 November 2023, the increase in interest rates had resulted in a downturn in Ballina Toyota’s business. This decreased the work required to be undertaken by the Parts department;

 

  • Mr Munro had informed the business that he was planning to finish working for Ballina Toyota by the end of the 2023 calendar It did not make sense to continue to carry the costs of engaging a casual employee to the end of the year;

 

  • It did not particularly suit Ballina Toyota to have a casual employee in the Parts department. Ballina Toyota only agreed to allow Mr Munro to convert from full time to casual to assist him while he was studying. Ballina Toyota wanted another full time employee, who could be relied on to turn up to work everyday, as opposed to a casual employee who had the right to reject a shift at any time and for any reason. Ballina Toyota was in the process of advertising for a full time employee in the Parts department and Mr Schmitt believed that the business could survive over the period leading up to Christmas and in January 2024, when it was traditionally quieter, without a third employee in the Parts department if a suitable full time employee could not be found.

 

  • At 3:22pm on 17 November 2023, Mr Schmitt sent the following text message to Mr Munro:

 

Effective as of today 17/11/23 there is no further work available for your casual position as ‘Parts Storeperson/delivery driver’.

 

Thank you for your contributions during your employment. Please return your work shirts before 24/11/23.

Regards

 

Andrew Schmitt Parts manager Ballina Toyota

 

  • Mr Schmitt did not attempt to call Mr Munro to discuss the termination of his employment before sending the termination text to him.

 

  • Mr Schmitt did some research about the process to terminate the employment of a casual employee before sending the termination text to Mr Mr Schmitt discovered that he did not need to provide a casual employee with notice of termination or redundancy pay. However, Mr Schmitt did not know that the Vehicle Award contained consultation obligations which needed to be complied with in relation to the redundancy of Mr Munro’s casual position.

 

  • Both Mr Thompson and Mr Schmitt deny that Mr Munro’s absence from work, by reason of illness, from 10 to 17 November 2023 formed any part of the reason for the decision to terminate Mr Munro’s I accept their evidence in that regard. I also accept their evidence that they made the decision to make Mr Munro’s position redundant for the reasons set out in paragraph [24] above. In making these findings I have taken into account the fact that the decision to dismiss Mr Munro was made when he had been absent from work for a week, Mr Munro was not consulted with about the redundancy of his position, and Ballina Toyota was still advertising to employ a full time Parts Interpreter at a time when they say there was a downturn in business and it made good business sense to take the cost of employing Mr Munro until the end of 2023 out of the business. True it is that these facts provide some support for Mr Munro’s contention that there was no operational basis for Ballina Toyota to terminate his employment on 17 November 2023. However, I accept that Mr Schmitt and Mr Thompson were not aware of the obligation under the Vehicle Award to consult with Mr Munro about the redundancy of his casual position. Further, while the timing of the decision to dismiss Mr Munro coincided with his 6th day of absence from work due to illness, I accept Mr Thompson’s evidence that Mr Munro’s absence from work during this period proved that the Parts department could handle the workload without also employing Mr Munro, particularly in the period leading up to Christmas when business was expected to decline further. The new full time Parts Interpreter which Ballina Toyota was seeking to hire would be of most use to the business in 2024 when the other two employees in the Parts department wanted to take leave. There was also an expectation that Ballina Toyota’s business would improve during 2024. The primary business documents produced by Ballina Toyota support its contention that there was a downturn in its business in late 2023.

 

  • For the reasons set out above, I am satisfied on the balance of probabilities that the real reason for Mr Munro’s dismissal was the redundancy of his casual position as Parts Storeperson/Delivery Driver and that Ballina Toyota no longer required Mr Munro’s role of casual Parts Storeperson/Delivery Driver to be performed by anyone because of changes in the operational requirements of Ballina Toyota’s enterprise.

 

Compliance with any consultation obligation in a modern award or enterprise agreement that applied to the employment (s 389(1)(b))

 

  • For there to be a genuine redundancy within the meaning of s 389 of the Act, Ballina Toyota must have complied with any obligation in a modern award or enterprise agreement to consult about the redundancy.

 

  • Clause 35 of the Vehicle Award governs consultation. It provides:

 

  1. Consultation about major workplace change

 

  • If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:
    • give notice of the changes to all employees who may be affected by them and their representatives (if any); and

 

  • discuss with affected employees and their representatives (if any):

 

  • the introduction of the changes; and

 

  • their likely effect on employees; and

 

  • measures to avoid or reduce the adverse effects of the changes on employees; and

 

  • commence discussions as soon as practicable after a definite decision has been

 

  • For the purposes of the discussion under clause 35.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
    • their nature; and

 

  • their expected effect on employees; and

 

  • any other matters likely to affect

 

  • Clause 2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.

 

  • The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 35.1(b).

 

38.5               In clause 35 significant effects, on employees, includes any of the following:

 

  • termination of employment; or

 

  • major changes in the composition, operation or size of the employer’s workforce or in the skills required; or

 

  • loss of, or reduction in, job or promotion opportunities; or

 

  • loss of, or reduction in, job tenure; or

 

  • alteration of hours of work; or

 

  • the need for employees to be retrained or transferred to other work or locations; or

 

  • job

 

35.6              Where this award makes provision for alteration of any of the matters defined at clause 35.5, such alteration is taken not to have a a significant effect.

 

  • Ballina Toyota did not meet its consultation obligations under the Vehicle Award in connection with its decision to make Mr Munro’s position redundant. Ballina Toyota did not provide any information to Mr Munro in writing. Nor did Ballina Toyota give notice to Mr Munro of the changes that it proposed to make to its business and discuss with him the introduction of those changes, their likely effect on Mr Munro, and measures to avoid or reduce the adverse effects of the changes on Mr Munro. The reason that Ballina Toyota failed to comply with these consultation obligations is that it was not aware that such obligations existed under the Vehicle Nevertheless, ignorance of the law does not excuse non-compliance with it.
  • I am satisfied that Ballina Toyota did not comply with its obligations under clause 35 of the Vehicle Award to consult with Mr Munro about his redundancy.

 

Was it reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer (s 389(2))

 

  • For the purposes of section 389(2) of the Act, the Commission must consider whether there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must be an appropriate evidentiary basis for such a finding.8 The word ‘redeployed’ in section 389(2) of the Act should be given its ordinary and natural meaning, which is to ‘transfer to another job, task or function’.9

 

  • If an employer wishes to rely on the ‘genuine redundancy’ exclusion in section 389 of the Act, then it would ordinarily be expected to adduce evidence, on the question of redeployment, as to whether there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. Such evidence would usually include the steps taken by the employer to identify other jobs, positions or work which could be performed by the dismissed employee.10

 

  • Whether it would have been reasonable in all the circumstances for the person to be redeployed, directs attention to the circumstances which pertained when the person was dismissed.11 However, the circumstances leading up to the time the employee was dismissed may, in particular cases (such as where there has been a redeployment period for an employee prior to their dismissal) be relevant to a determination of whether it would have been reasonable in all the circumstances for the employee to have been redeployed.12

 

  • In determining whether redeployment would have been reasonable, a number of matters may be relevant, including:

 

  • whether there exists a job or position or other work to which the employee can be redeployed;13

 

  • the nature of any available position;14

 

  • qualifications required to perform the job;15

 

  • the employee’s skills, qualifications and The employee should have the skills and competence required to perform the role to the required standard either immediately or within a reasonable period of retraining;16 and

 

  • the location of the job in relation to the employee’s residence and the remuneration which is offered.17

 

  • Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy.18

 

  • It is important, however, to appreciate that, because there is a requirement to assess the reasonableness of redeployment ‘in all the circumstances’, it is not possible to establish binding or decision rules concerning the application of section 389(2) of the Act in all cases; the circumstances of each particular case must be considered.19

 

  • The only position into which Mr Munro could have been redeployed was that of full time Parts However, Mr Munro was not interested in that position, which had been advertised since about July 2023.

 

  • For the reasons given, it would not have been reasonable in all the circumstances for Mr Munro to have been redeployed within Ballina Toyota’s enterprise.

 

Conclusion on genuine redundancy

 

  • Ballina Toyota did not comply with its consultation obligations under clause 35 of the Vehicle For this reason alone, Ballina Toyota’s dismissal of Mr Munro was not a case of genuine redundancy within the meaning of s 389 of the Act. However, contrary to Mr Munro’s submissions, it does not automatically follow that his dismissal was unfair simply because it was not a genuine redundancy within the meaning of the Act.”

 

 

Munro v The Trustee For The Ross Tait Motors Ballina Trust (2024) FWC 378 delivered 12 February 2024 per Saunders DP