WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2015 WAIRC 00179 CORAM :Commissioner J L Harrison HEARD : Tuesday, 20 January 2015 DELIVERED : tuesday, 17 february 2015 FILE NO. : U 191 OF 2014 BETWEEN : Charles Tysoe Applicant AND The Owners of Strathearn SP 1082 ABN 37397560589 C/- Smithwick Strata Services ABN 36995277562 Respondent Catchwords : Termination of employment - Claim of harsh, oppressive or unfair dismissal - Termination due to redundancy - Principles applied - Applicant not harshly, oppressively or unfairly dismissed - Application dismissed Legislation : Industrial Relations Act 1979 s 26(1)(a), s 27(1) and s 29(1)(b)(i) Minimum Conditions of Employment Act 1993 s 40, s 41, s 42 and s 43 Result : Dismissed Representation: Applicant : In person Respondent : Ms D Thornton Case(s) referred to in reasons: Amalgamated Metal Workers and Shipwrights Union of Western Australia v Australian Shipbuilding Industries (WA) Pty Ltd (1987) 67 WAIG 733 Bridge Shipping Pty Ltd v Grand Shipping SA and Anor [1991] 173 CLR 231 Byrne v Australian Airlines (1995) 61 IR 32 Gilmore v Cecil Bros and Ors (1996) 76 WAIG 4434 Rai v Dogrin Pty Ltd (2000) 80 WAIG 1375 Shire of Esperance v Mourz (1991) 71 WAIG 891 Undercliffe Nursing Home v Federated Miscellaneous Workers Union of Australia, Hospal Service and Miscellaneous WA Branch (1985) 65 WAIG 385 WA Access Pty Ltd v Vaughan (2000) 81 WAIG 373 === REASONS FOR DECISION === ¶1 Charles Tysoe (the applicant) claims that he was unfairly dismissed by The Owners of Strathearn SP 1082 ABN 37397560589 C/- Smithwick Strata Services ABN 36995277562 (the respondent) on 22 August 2014. The respondent disputes the applicant’s claim. Name of the respondent ¶2 During the proceedings it became apparent that the respondent had been incorrectly named. Given the Commission’s powers under s 27(1) of Industrial Relations Act 1979 (the Act) and as it is appropriate for the respondent to be correctly named, I will issue an order that The Owners of Strathearn SP 1082 ABN 37397560589 C/- Smithwick Strata Services ABN 36995277562 be deleted as the named respondent in this application and be substituted with The Owners of Strathearn (see Rai v Dogrin Pty Ltd (2000) 80 WAIG 1375 and Bridge Shipping Pty Ltd v Grand Shipping SA and Anor [1991] 173 CLR 231). Background ¶3 The applicant, who was the only person employed by the respondent, was employed as a full-time live-in caretaker at premises located in Kings Park Avenue, Crawley (the complex) between 1 October 2007 and 22 August 2014. His annual salary at termination was $60,979 and he worked approximately 40 hours per week. The applicant was required to complete after hours emergency work at the complex and in return was given one day off each month. The applicant lived free of charge in a flat at the complex and was not required to pay his utility costs. The applicant’s duties included cleaning the complex, liaising with residents, supervising contractors and undertaking minor day-to-day maintenance. ¶4 The respondent contracted Smithwick Strata Services (Smithwick) to manage the complex. Smithwick’s managing director, Mr Henry van Es liaised with the applicant about work to be undertaken at the complex and matters relating to the applicant’s employment. They had a good working relationship. Mr van Es also liaised with the respondent’s council of owners about overseeing the running of the complex and he usually attended council of owners meetings and the respondent’s Annual General Meeting (AGM). Prior to the respondent’s 2014 AGM held on 16 June 2014 some of the respondent’s owners contacted Mr van Es about the possibility of altering the applicant’s full-time caretaker position to that of a part-time contract position to save costs. After completing some research Mr van Es advised the owners at the 2014 AGM that other complexes using caretakers did not employ them on a full-time basis. After a discussion about this issue at the 2014 AGM the respondent decided that the council of owners would review how the caretaker position could be undertaken and review alternatives. Mr van Es visited the applicant the following day and as a courtesy told him that the position of a full-time caretaker may no longer be required by the respondent. After their discussion the applicant sent the following email to Mr van Es on 26 June 2014: Thank you for informing me of the possible redundancy of my position at Strathearn. I would like to extend to you the same courtesy and let you know that I am currently seeking permanent employment elsewhere and should any of these applications prove sussesfull [sic] I will give the standard 10 days [sic] notice. I would prefer to remain at Strathearn but I need full time employment for at least the next 19 months. (Exhibit A2) Mr van Es forwarded this email to the chair of the council of owners, Mr Allan Green, on 26 June 2014. ¶5 The respondent’s council of owners met on 8 July 2014 to discuss alternatives to having a full-time live-in caretaker position at the complex (see the minutes of this meeting - exhibit R1). A person who could possibly undertake a part-time contract position to replace the applicant was then interviewed by the council of owners. At a further meeting of the council of owners on 16 July 2014 the council, on behalf of the respondent, decided to employ a part-time non live-in caretaker and the person who the council of owners had interviewed would be appointed to undertake this role. Mr Green then sent the following email to Mr van Es on 16 July 2014 confirming this decision and requesting Mr van Es to terminate the applicant: This morning, Dorothy, Elizabeth, Greg and I met with Wendy Sweeting and had a fruitful discussion. We are unanimous in agreeing that she be appointed as Strathearn caretaker for a 3 month mutual trial period. Please take the appropriate steps to inform Charles that his position as live- in caretaker has been made redundant and give him the legal length of notice that his services are no longer required. Thanks for your contribution in carrying out this process. (Exhibit R3) ¶6 On behalf of the respondent Mr van Es wrote a letter to the applicant on 25 July 2014 advising him of his termination. This letter reads in part: Termination of your employment by reason of redundancy The purpose of this letter is to confirm the outcome of the decision by the council of owners that the role of live-in care taker was no longer required by Strathearn. On Wednesday 9th July 2014 Henry van Es of Smithwick Strata services had a discussion with yourself regarding this intention and this letter confirms the role will no longer be required from Monday 25th August 2014. Regrettably this means your employment will terminate. This decision is not a reflection on your performance. Based on your length of service, your notice period is 4 weeks. Therefore your employment will end on Friday 22nd August 2014. (Exhibit A3) Evidence Applicant ¶7 Mr van Es visited the applicant on 17 June 2014 and told him that the respondent had decided that his position may be made redundant because the respondent was reviewing alternatives to having a full-time live-in caretaker to reduce costs. The applicant formally responded to Mr van Es about this issue by email on 26 June 2014. After this meeting with Mr van Es the applicant had no discussions with Mr van Es or the respondent about his ongoing employment with the respondent or alternatives to his termination. Even though Mr van Es referred to having a discussion with the applicant on 9 July 2014 in the applicant’s letter of termination the applicant could not recall speaking to him on that date. The applicant gave evidence that if he had the opportunity to talk to the respondent about alternatives to his termination he would have considered reducing the hours he worked to continue working with the respondent and/or move out of the complex and rent a place elsewhere. He would now not consider working in the part-time caretaker position because of the way he was treated by the respondent and he believes the working environment would be hostile. ¶8 The applicant is currently employed as a casual caretaker, which is not a live-in position, working an average of 14 hours per week at a resort in Mandurah and he started this job a week after ceasing employment with the respondent. He earns $23 per hour in this role. The applicant is seeking compensation of 59 weeks’ pay up to when he retires, $250 per week for that period covering the value of his accommodation and utilities and $50 as reimbursement for the application fee. ¶9 Under cross-examination the applicant maintained that when he had a discussion with Mr van Es after the 2014 AGM he did not tell Mr van Es that he only wanted to continue working with the respondent on a full-time basis. He maintained that Mr van Es told him that the respondent was considering making the caretaker position redundant and he did not provide him with any detail at the time about what may occur. Respondent ¶10 Ms Donna Thornton has been a member of the respondent’s council of owners since June 2014. At the 2014 AGM a number of owners wanted the applicant’s full-time live-in caretaker position reviewed to cut costs and the respondent decided that the council of owners would manage this process. Ms Thornton was aware that Mr van Es had a discussion with the applicant the day after the 2014 AGM because Mr van Es told her that he did so and he told her the applicant was informed that the council of owners was deciding if the caretaker position could be undertaken on a part-time basis. The council of owners met on 8 July 2014 to discuss how the applicant’s duties could be undertaken and the possibility of the caretaker position being completed on a part-time basis. The council of owners decided at this meeting that the applicant’s role could be done part-time and a possible contractor for the position was to be interviewed for this role (see exhibit R1). ¶11 Ms Thornton maintained that the applicant was not legally entitled to the redundancy payment given to him by the respondent. Ms Thornton confirmed that the respondent did not have any discussions with the applicant about alternatives to him being terminated once the respondent decided to terminate him. ¶12 Mr van Es stated that the respondent discussed whether it was appropriate to continue employing the applicant on a full-time basis at the 2014 AGM. Mr van Es visited the applicant the following day and told him that employing a full-time caretaker at the complex could change and in response the applicant told him that he needed to work full-time up to when he retired. Mr van Es promised to keep the applicant informed of any decisions made about his position. Mr van Es could not recall having any discussions with the applicant about his termination after his meeting with the applicant on 17 June 2014 and even though the applicant’s letter of termination refers to him meeting the applicant on 9 July 2014 he could not recall this meeting taking place. Mr van Es confirmed that after the council of owners decided to terminate the applicant on 16 July 2014 Mr Green instructed him to write to the applicant informing him of this decision. ¶13 Under cross-examination Mr van Es stated that he reviewed alternatives to the caretaker position being undertaken on a full-time basis prior to the 2014 AGM after some owners had raised the possibility of changing the terms of this position. Mr van Es confirmed that the new contractor is a former employee of Smithwick. ¶14 Mr Green has been the chairperson of the respondent’s council of owners for 11 years. Mr Green was aware that prior to the 2014 AGM some owners wanted to review the full-time caretaker position at the complex with a view to saving costs. Mr Green stated that at the 2014 AGM owners decided to consider having a change to the applicant’s full-time position and the council of owners was to investigate cheaper options after the 2014 AGM. The council of owners met on 16 July 2014 to discuss a revised caretaker arrangement and later that day an email was sent to Mr van Es confirming that the applicant was to be terminated because the respondent had decided to employ a contractor in his position working less hours than the applicant (exhibit R3). ¶15 Mr Green gave evidence that the cost difference of having a non live-in contractor working fewer hours than the applicant in his caretaker role was significant. Employing a part-time contractor was approximately $60,000 per annum compared to the cost of employing a full-time caretaker which was approximately $100,000 per annum. A further saving was delivered to the respondent from income the respondent would receive from renting out the applicant’s flat at the complex. Mr Green stated that no discussions were held with the applicant about canvassing alternatives to his termination because the applicant had told Mr van Es that he only wanted to be employed on a full-time basis in his email dated 26 June 2014 (exhibit A2). ¶16 Ms Marilyn Watts is employed by Smithwick. Ms Watts drafted a positive reference for the applicant and spoke favourably about his skills and attributes to a prospective employer after he was terminated. Submissions Applicant ¶17 The applicant claims that his termination was unfair because the respondent had no discussions with him about alternatives to his termination. The applicant maintains that there was no motion at the 2014 AGM to make his position redundant and as a contractor has been engaged to undertake the work of the caretaker position the position is not redundant. The applicant claimed that his position was not made redundant even though the new contractor was working less hours than he was employed to work and he claimed that the contractor who replaced him was appointed to his former position because she had a connection to Smithwick and knew one or more owners of the complex. The applicant believes that the compensation he is seeking is adequate recompense for being unfairly dismissed and losing his long-term employment with the respondent. Respondent ¶18 The respondent claims that prior to 16 July 2014, when the decision was made to terminate the applicant, the applicant sent an email to Mr van Es which was communicated to the respondent that he was not interested in continuing to work with the respondent on a part-time basis. The respondent therefore did not have any discussions with the applicant about the possibility of him remaining employed at the complex once it decided to have the caretaker role at the complex filled on a part-time basis. By abolishing the applicant’s full-time position, the savings to the respondent are approximately $50,000 per year. This includes reduced employment costs as well as income from letting the flat lived in by the applicant. The respondent treated the applicant fairly and endeavoured to assist him by giving him 11 weeks in redundancy payments as well as a positive reference. The quantum the applicant is seeking is unreasonable and the applicant obtained alternative employment one week after ceasing employment with the respondent, which should be taken into account. Consideration Witness Credit ¶19 In my view the witnesses who gave evidence for the respondent gave their evidence in a clear and considered manner and I find that they gave their evidence to the best of their recollection. I therefore accept their evidence. ¶20 I find that most of the evidence given by the applicant was given honestly and to the best of his recollection. However, I do not have confidence in the applicant’s evidence that he may have accepted working on a part-time basis and/or would have considered moving out of the flat he lived in free of charge at the complex so that he could continue his employment with the respondent if given the opportunity to consider these options. I also question the applicant’s claim that he was unaware of a possible reduction in hours of his caretaker position prior to his termination. I have already indicated that I have confidence in the veracity of the evidence given by Mr van Es. I find that during a discussion between Mr van Es and the applicant on 17 June 2014 the applicant told him that he needed to work full-time until he retired when told of the possibility that his existing role may be reduced to a part-time job in the future. In support of this conclusion I rely on the content of the email the applicant sent to Mr van Es after Mr van Es visited him on 17 June 2014 where the applicant indicated that even though he would like to remain working with the respondent he needed full-time employment for at least the next 19 months until his retirement (see exhibit A2). Apart from the applicant’s evidence about this issue, I accept the other evidence he gave. Was the applicant unfairly dismissed? ¶21 The test for determining whether a dismissal is unfair or not is well settled. The question is whether the employer acted harshly, unfairly or oppressively in dismissing the applicant (see Undercliffe Nursing Home v Federated Miscellaneous Workers Union of Australia, Hospital Service and Miscellaneous WA Branch (1985) 65 WAIG 385). The onus is on the applicant to establish that the dismissal was, in all the circumstances, unfair. Whether the right of the employer to terminate the employment has been exercised so harshly or oppressively or unfairly against the applicant as to amount to an abuse of the right needs to be determined. A dismissal for a valid reason whin the meaning of the Act may still be unfair if, for example, is effected in a manner which is unfair. However, terminating an employee in a manner which is procedurally irregular may not mean the dismissal is unfair (see Shire of Esperance v Mouritz (1991) 71 WAIG 891 and Byrne v Australian Airlines (1995) 61 IR 32). In Shire of Esperance v Mouritz, Kennedy J observed that unfair procedures adopted by an employer when dismissing an employee are only one element that needs to be considered when determining whether a dismissal was harsh or unjust. ¶22 Redundancy is defined in the Termination, Change and Redundancy General Order as occurring ‘where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone’ (2005 WAIRC 01715; 85 WAIG 1667). When an employee’s position has been abolished and that employee is terminated due to their position being made redundant this is a sufficient reason for dismissal (Amalgamated Metal Workers and Shipwrights Union of Western Australia v Australian Shipbuilding Industries (WA) Pty Ltd (1987) 67 WAIG 733). ¶23 I find that the respondent had a valid reason for terminating the applicant. I find that the applicant was terminated because the council of owners, on behalf of the respondent, decided that his full-time live-in caretaker position was no longer required to be filled by any employee on 16 July 2014. The applicant’s position therefore became redundant. I find that because the applicant had indicated to the respondent via Mr van Es that he only wanted to continue working as a caretaker at the complex on a full-time basis he was not considered by the respondent to be employed in the new part-time caretaker position. The applicant’s position was abolished and as there was no other position available for him to undertake as the applicant was the respondent’s only employee I find that the respondent had sufficient reason for terminating the applicant. I find that a significant factor in the respondent deciding to abolish the applicant’s position was the considerable savings which were delivered to the respondent by ceasing to employ a full-time caretaker and instead employing a part-time non live-in contractor to complete the tasks previously undertaken by the applicant. As the applicant would not be occupying the flat on the premises free of charge this allowed the respondent to also receive income from renting this flat out. Even though no income from rent has been received by the respondent to date I accept this is because the flat has recently been renovated. ¶24 The Minimum Conditions of Employment Act 1993 (MCE Act) is implied into the applicant’s contract of employment. A failure to comply with the mandatory requirements of Part 5 of the MCE Act is a factor to be taken into account in deciding whether a dismissal is unfair (see Gilmore v Cecil Bros and Ors (1996) 76 WAIG 4434 (4445); WA Access Pty Ltd v Vaughan (2000) 81 WAIG 373 (378)). ¶25 The relevant sections of the MCE Act read as follows: [Part 5 — Minimum conditions for employment changes with significant effect, and redundancy] [40. Terms used] (1) In this Part — employee does not include a casual employee or an apprentice; redundant means being no longer required by an employer to continue doing a job because the employer has decided that the job will not be done by any person. (2) For the purposes of this Part, an action of an employer has a significant effect on an employee if — (a) there is to be a major change in the — (i) composition, operation or size of; or (ii) skills required in, the employer’s work-force that will affect the employee; or (b) there is to be elimination or reduction of — (i) a job opportunity; or (ii) a promotion opportunity; or (iii) job tenure, for the employee; or (c) the hours of the employee’s work are to significantly increase or decrease; or (d) the employee is to be required to be retrained; or (e) the employee is to be required to transfer to another job or work location; or (f) the employee’s job is to be restructured. [41. Employee to be informed] (1) Where an employer has decided to — (a) take action that is likely to have a significant effect on an employee; or (b) make an employee redundant, the employee is entitled to be informed by the employer, as soon as reasonably practicable after the decision has been made, of the action or the redundancy, as the case may be, and discuss with the employer the matters mentioned in subsection (2). (2) The matters to be discussed are — (a) the likely effects of the action or the redundancy in respect of the employee; and (b) measures that may be taken by the employee or the employer to avoid or minimize a significant effect, as the case requires. [42. Employer not bound to disclose prejudicial information] Nothing in this Act requires an employer, when providing information or holding a discussion under section 41(1) to disclose information that may seriously harm — (a) the employer’s business undertaking; or (b) the employer’s interest in the carrying on, or disposition, of the business undertaking. [43. Paid leave for job interviews, entitlement to] (1) An employee, other than a seasonal worker who has been informed that he or she has been, or will be, made redundant is entitled to paid leave of up to 8 hours for the purpose of being interviewed for further employment. (2) The 8 hours need not be consecutive. (3) An employee who claims to be entitled to paid leave under subsection (1) is to provide to the employer evidence that would satisfy a reasonable person of the entitlement. (4) Payment for leave under subsection (1) is to be made in accordance with section 18. ¶26 Section 41 of the MCE Act requires that when an employer has decided to make an employee redundant, which was the case in this instance, that employee is to be informed by the employer of the decision to make him or her redundant in a timely manner after that decision has been made and the employer is required to discuss the effect of the redundancy on the employee and measures that may be taken to minimise the impact of the redundancy on the employee. Section 43 of the MCE Act provides that an employee is entitled to paid leave of up to eight hours to attend interviews for other employment and the eight hours need not be consecutive. ¶27 The applicant complained that the way in which he was terminated was unfair as he had no opportunity to discuss alternatives to his termination with the respondent prior to being given notice of his termination. The applicant claimed that if he had the opportunity to have discussions with the respondent prior to his termination he might have considered leaving the flat he was living in rent free and the possibility of working part-time hours to continue his employment at the complex. It was not in dispute and I find that the respondent did not have any discussions with the applicant about alternatives to his termination or minimising the impact of the redundancy on him after the respondent decided on 16 July 2014 that the applicant’s position was redundant and the applicant was to be terminated. Given the circumstances of this case, I find that it was unnecessary for the respondent to have discussions with the applicant about alternatives to his termination and minimising the impact of his termination on him once the respondent decided that the applicant’s position would be abolished and replaced with a part-time non live-in contractor. I find that even if the respondent had discussions with the applicant about alternatives to his termination once the decision was made to abolish his position these discussions would not have resulted in the applicant agreeing to work less than full-time hours or to move out of the free accommodation provided by the respondent. I have already found that the applicant’s evidence with respect to his claim that he would consider alternatives to his full-time live-in caretaker role at the complex is not to be believed. The applicant had made it clear to Mr van Es during their discussion on 17 June 2014 when Mr van Es foreshadowed the possibility of the applicant’s position becoming part-time that he was only interested in continuing to work with the respondent on a full-time basis. The applicant confirmed this in the email he sent to Mr van Es which was forwarded to Mr Green on 26 June 2014. The applicant also did not raise the possibility of continuing to work at the complex on a non live-in basis in this email (see exhibit A2). I therefore find that it was acceptable for the respondent not to have discussions with the applicant about alternatives to his termination after it decided to make the applicant’s position redundant and replace him with a non live-in contractor working on a part-time basis. ¶28 The applicant did not seek nor was he given paid leave to attend a job interview after he was notified that he was to be terminated (see s 43 MCE Act). I find that this issue is of no consequence as the applicant could have raised access to this entitlement with the respondent during the four weeks of his notice period but he did not do so. He also did not demonstrate that not accessing paid leave to attend a job interview caused him any disadvantage. ¶29 The applicant claimed that the person who was contracted to replace him was connected with Smithwick and at least one member of the council of owners and that this was relevant when determining whether his termination was unfair. I find that the applicant’s claim that he was possibly terminated to give another employee his job has no substance as I have found that the applicant was terminated due to a genuine redundancy situation as the respondent was seeking to reduce its operating costs. ¶30 In all of the circumstances, and when taking into account s 26(1)(a) of the Act considerations and equity, good conscience and substantial merit, I find that there was a valid reason for the applicant’s termination and that he was afforded a fair go all around. He was therefore not unfairly terminated (Undercliffe Nursing Home v Federated Miscellaneous Workers Union of Australia, Hospital Service and Miscellaneous WA Branch). ¶31 An order will now issue dismissing this application.