WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION PARTIES KAMELLO LEBEIDI, APPLICANT v. OSTERIA CAFE PIZZARIA RESTAURANT, RESPONDENT CORAM COMMISSIONER J L HARRISON DATE WEDNESDAY, 7 AUGUST 2002 FILE NO. APPLICATION 376 OF 2002 CITATION NO. 2002 WAIRC 06165 _________________________________________________________________________________________________________ Result Application alleging unfair dismissal upheld and order issued for some compensation Representation Applicant Mr K Lebeidi, on his own behalf Respondent Mr G Securo _________________________________________________________________________________________________________ Reasons for Decision 1 This is an application pursuant to s.29(1)(b)(i) of the Industrial Relations Act 1979 (“the Act”), whereby Mr Kamello Lebeidi (“the applicant”) claims he was unfairly dismissed from his employment with Osteria Café Pizzaria Restaurant (“the respondent”) on 17 February 2002. 2 The respondent claims that there was no unfair dismissal as the respondent terminated the applicant because it could no longer afford to employ the applicant. 3 Mr Lebeidi gave evidence on his own behalf and Mr Securo, the Manager of Osteria Café Pizzaria Restaurant, gave evidence on behalf of the respondent. 4 The applicant gave evidence that he commenced employment with the respondent on 31 October 2001. The applicant obtained employment as a chef, subsequent to answering a newspaper advertisement. 5 The applicant gave evidence that he was employed to run the kitchen and to teach the other cook employed by the respondent. He stated that things went well initially, however towards the end of December 2001 and in early January 2002, he had personality difficulties with the other cook. He communicated these difficulties to Mr Securo, however he claims nothing was done to resolve the situation. He stated that by early February 2002 his relationship with Mr Securo had deteriorated. On the 17 February 2002, without warning, a meeting was held between the applicant, Mr Securo and his wife Mrs Ritsa Securo. It was indicated to the applicant at this meeting that the respondent could not afford to continue employing the applicant. He was then terminated. The applicant was paid 1 week’s pay for annual leave entitlements and 1 week’s pay in lieu of notice of termination. This was paid on the basis of a wage of $800 per week, which was the rate of pay agreed between the applicant and the respondent when he was employed. 6 The applicant claimed that after he was terminated by the respondent, he had been replaced and on that basis he believed that his termination was unfair. Since finishing work with the respondent, he has managed to obtain 16 week’s work on a part-time basis, earning $160 per week and worked for 2 weeks earning $90 per week. The applicant is currently unemployed and unable to work due to an injury he sustained to his back in the week prior to the hearing. 7 Mr Securo gave evidence for the respondent. He confirmed that the applicant was employed to assist in the kitchen. A number of Mr Securo’s family members also assisted at the restaurant, including his mother, who also cooked. 8 The respondent entered into a contract in August 2001 with The Gateway Suites to run the restaurant section of that operation. The respondent was operating with an overdraft of $50,000. Since it commenced operating, business costs were over the overdraft limit. As a result, the bank started to stop cheques and then took over administration of the restaurant’s books. Because of these problems the bank insisted that the respondent operate on a credit account with a specific limit. Mr Securo stated that as a result of this, he was looking at refinancing options for the restaurant. Towards the end of January 2002, the bank made it clear to Mr Securo that costs had to be cut. He discussed the issue with his wife and it was decided that Mr Securo’s mother would undertake more unpaid work, and that the applicant would be terminated as he was the last person to be employed. 9 Notwithstanding the applicant’s termination, it was Mr Securo’s evidence that the respondent is still experiencing financial problems and has had to raise further capital to keep the business afloat. In the 11 months since the business commenced, it has not operated at a profit. Mr Securo confirmed that since the applicant finished employment with the respondent, no additional employees had been taken on, however one employee who left was replaced by a young chef. Hours for employees have been 2216 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 82 W.A.I.G. reduced, in order to meet the demands of the bank. To compensate for this reduction in hours, Mr Securo’s family has been helping out, including his children. 10 Mr Securo confirmed the applicant’s account of the meeting of 17 February 2002, and stated that the meeting was difficult and emotional for the respondent, because he had never had to terminate an employee before. 11 Mr Securo claimed that the applicant knew that the respondent was aware of financial problems, due to the fact that some of the applicant’s wage cheques had bounced prior to him being terminated. 12 Mr Securo gave evidence that there were personality conflicts between the applicant and two other employees, and he had made every effort to put them onto separate rosters so that this conflict did not continue. Mr Securo claimed there was no issue with the applicant’s performance or behaviour, even though there were arguments between the applicant and other staff members. Submissions 13 The applicant submitted that personality issues between him and some other staff had led to him being terminated. At the meeting on 17 February 2002 he was faced with a fait accompli and was not given any opportunity to explore alternatives to termination. 14 The respondent submitted that this was a termination due to financial constraints and pressure from the bank to cut costs. On that basis, one employee had to be terminated and on the basis of last on, first off, it was the applicant who was chosen to be terminated. Findings 15 I find that the applicant was employed as a chef with the respondent between 31 October 2001 and 17 February 2002. 16 After having carefully observed the witnesses I accept Mr Securo’s version of events in preference to that of the applicant in relation to the reasons for the applicant’s termination. Mr Securo recounted events and details clearly and logically. In contrast the applicant was unable to provide specifics of why he says he was terminated. On this basis, I find that the applicant was terminated because of financial difficulties being experienced by the respondent. 17 I find that the applicant was made redundant by the respondent at a meeting held on 17 February 2002. I accept that the respondent had to restructure its operations due to financial difficulties, and as a consequence the respondent needed to reduce its costs. One option was to reduce the number of employees, thus, the applicant’s position was abolished as he was the last person employed. I find that the applicant was chosen to be terminated within this context. Given my findings on credibility, I do not accept that the applicant was terminated because of personality differences with other employees and because of problems with Mr Securo. 18 I find that there was no discussion with the applicant as to alternatives to redundancy, and that the applicant was given no indication that his employment was to be terminated until the meeting was held on 17 February 2002. 19 I find that at this meeting the applicant had no opportunity to argue that an employee other than the applicant should have been selected in preference to him for redundancy. Principles and Conclusions 20 I turn now to the principles in relation to these matters. 21 Redundancy is itself a sufficient reason for dismissal (Amalgamated Metal Workers and Shipwrights Union of Western Australia and the Operative Painters and Decorators Union of Australia, West Australian Branch, Union of Workers v Australian Shipbuilding Industries (WA) Pty Ltd (1987) 67 WAIG 733). 22 If a decision is made to make an employee redundant based on the operational requirements of the company that can be a valid reason for the dismissal. In this case I am of the view that the applicant was terminated for a valid reason. 23 Having said that it is appropriate to consider any unfairness in relation to the process used in effecting redundancy, as well as all of the circumstances surrounding the termination of the employment having regard to s.26 of the Act. 24 The provisions of Part 5 of the Minimum Conditions of Employment Act 1993 (“MCEA”) are implied into the contract of employment of the applicant. This section provides that where an employer has decided to make an employee redundant the employee is entitled to be informed by the employer as soon as is reasonably practicable after the decision has been made of the redundancy and discuss with the employee the likely effects of the redundancy and measures that may be taken to avoid or minimise its effect. This was not done. It is clear on the evidence that there was no discussion of this nature with the applicant once the decision was made by the respondent to make him redundant. Furthermore, the applicant was deprived of any ability to avail himself of paid leave to attend for job interviews, which is prescribed in Part 5 of the MCEA. For this reason, in my view, I consider that to the extent the applicant was not consulted in relation to his dismissal, his termination was unfair. Further, the applicant had no opportunity to argue that another employee should be made redundant instead of the applicant. There was in my view, a clear breach of the requirements of Part 5 of the MCEA and on this basis alone, the dismissal was harsh, oppressive and unfair: Miles and Others trading as The Undercliffe Nursing Home v Federated Miscellaneous Workers’ Union of Australia, Hospital, Service and Miscellaneous, Western Australian Branch (1985) 65 WAIG 385. 25 Having said that I now turn to the question of relief in this case. The applicant seeks compensation for loss. 26 The applicant does not claim reinstatement and in my view, given the particulars of this case reinstatement is impracticable. 27 In this instance, there is no basis to conclude that the applicant has suffered the loss of a reasonable severance payment, given his short length of service with the respondent. 28 However, as the respondent failed to comply with Part 5 of the MCEA, the applicant has been deprived of the opportunity to discuss alternatives with the respondent. This would have included whether he could have continued in employment in another capacity, in preference to another employee of the respondent. Furthermore, the applicant has, as I have noted above, been deprived of the ability to avail himself of the statutory right under s.43 of the MCEA, to paid leave of absence for the purposes of attending job interviews, given the summary manner of his dismissal. 29 In view of my conclusions that the applicant could not have reasonably established someone other than he should have been made redundant, I consider that the applicant’s loss in this case is represented by a period to enable the matters in Part 5 of the MCEA to be attended to, which I find to be in this case, one week’s pay constituted by $800.00 nett. An order will now issue. _________ 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 2217 2002 WAIRC 06205