Andrew Reed, Tony Feeney, Terrence Lee, Antonio Rossi & James Spencer v CPB Contractors Pty Ltd
[2023] FWC 610
•21 MARCH 2023
| [2023] FWC 610 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Andrew Reed, Tony Feeney, Terrence Lee, Antonio Rossi & James Spencer
v
CPB Contractors Pty Ltd
(U2022/9850, U2022/9851, U2022/9852, U2022/9853, U2022/9855)
| COMMISSIONER BISSETT | MELBOURNE, 21 MARCH 2023 |
Application for an unfair dismissal remedy – genuine redundancy – applications dismissed
Mr Andrew Reed, Mr Tony Feeney, Mr Terrence Lee, Mr Antonio Rossi and Mr James Spencer (the Applicants) have each made an application in which they seek a remedy for unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (FW Act). The Applicants were employed by CPB Contractors Pty Ltd (the Respondent), most recently on the Monash Freeway Upgrade – Stage 2 Project (Monash Project). The Respondent is part of the CIMIC Group and is a “construction company that designs and builds infrastructure including roads, rail, tunnelling, defence, building and resources infrastructure.”[1]
The Respondent objects to each of the applications as it submits that the dismissals were a case of genuine redundancy as defined in s.369 of the FW Act.
It is not disputed, and I am satisfied, that each of the Applicants made their applications within the time limit prescribed by the FW Act, that the Respondent is not a small business such that the Small Business Fair Dismissal Code (SBFDC) does not apply, and that each Applicant is protected from unfair dismissal.
A person has been unfairly dismissed if each of the requirements in s.385 of the FW Act are met. That is that the person has been dismissed, the dismissal was not consistent with the SBFDC, the dismissal was harsh, unjust or unreasonable and the dismissal was not a genuine redundancy. If it is that each of the dismissals was a genuine redundancy the relevant Applicant cannot have been unfairly dismissed within the meaning of the FW Act.
The circumstances surrounding the termination of employment of each Applicant are identical. The parties agreed therefore that the applications should be heard concurrently with the evidence in one case considered evidence in all cases.
Prior to the hearing I exercised my discretion and granted permission to each party to be represented by a lawyer. At the hearing before me the Applicants were represented by the Australian Workers’ Union (AWU) and the Respondent by a solicitor.
At the commencement of the hearing, having heard from the parties, I determined that the matter should proceed by way of hearing.
Evidence was given in the hearing by each of the Applicants and, for the Respondent, by:
Ms Katherine Brewis (Project Director Monash Project),
Mr Michael Munzenberger (Construction Manager),
Ms Tracey Henderson (Operations Support Services Manager)
Court Book
Prior to the hearing of the applications my chambers constructed a paginated court book consisting of submissions and evidence of all parties. The court book was admitted into evidence with the agreement of the parties. The reference to evidence is by way of the relevant page number in the court book.
Enterprise agreement
The employment of the Applicants was covered by the Melbourne Major Road Projects Greenfields Agreement 2020 (the Agreement). The Agreement was approved on 15 April 2020 and operated from 22 April 2020. It has a nominal expiry date of 24 March 2024. The Agreement approval notes that the application for approval was made by the Respondent and that the AWU is entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement.
The Agreement applies to general civil construction work performed by employees of the Respondent on a number of projects, including the Monash Project on which the Applicants were employed.
The Agreement provides for consultation as follows:
2.3 CONSULTATION REGARDING MAJOR WORKPLACE CHANGE
2.3.1 This term applies if the employer:
(a)Has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees or
(b)Proposes to introduce a change to the regular roster or ordinary hours of work of employees.
Major change
2.3.2 For a major change referred to in clause 2.3.1(a):
(a)The employer must notify the relevant employees of the decision to introduce the major change and
(b)Clauses 2.3.1(a) to 2.3.10 apply.
2.3.3The relevant employees may, but need not, appoint a representative of their choice for the purposes of the procedures in this clause.
2.3.4If:
(a)A relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation and
(b)The employee or employees advise the employer of the identity of the representative; the employer must recognise the representative.
2.3.5 As soon as practicable after making its decision, the employer must:
(a)Advise 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 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.
2.3.6However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.
2.3.7 The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.
2.3.8If 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 clauses 2.3.2(a), 2.3.3 and 2.3.5 are taken not to apply.
2.3.9In this term, a major change is likely to have a significant effect on employees if it results in:
(a)The termination of the employment of employees, or
(b)Major change to the composition, operation or size of the employer’s workforce or to the skills required of employees, or
(c)The elimination or diminution of job opportunities (including opportunities for promotion or tenure), or
(d)The alteration of hours of work, or
(e)The need to retrain employees, or
(f)The need to relocate employees to another workplace, or
(g)The restructuring of jobs.
Change including demobilisation of employees related to the customary completion and winding down of project activities does not constitute major change. [Underlining added]
Employment of the Applicants
The background to the employment of the Applicants is not in contest.
Andrew Reed
Mr Reed commenced employment with the Respondent in July 2020 on the M80 Upgrade project (also covered by the Agreement). In May 2022 he was advised that he was to be made redundant from that project. This was disputed by the AWU and the notification was withdrawn. At this time Mr Reed was contacted by Mr Spencer who said there was a job for him on the Monash Project. Mr Reed moved to the Monash Project in July 2022. He was based at the Ferntree Gully Road compound and worked as a labourer and driving trucks.
He attended a meeting of full-time employees of the Respondent with management representatives on 15 September 2022.
On 19 September 2022 Mr Reed was called to a meeting with the Respondent along with other employees and advised that avenues regarding alternative employment opportunities had been exhausted and redundancies would occur. Mr Reed was advised that he was to be made redundant effective that day and was given a letter to that effect.
Tony Feeney
Mr Feeney commenced employment with the Respondent in November 2020 on the M80 Upgrade Project. When this project wound down he was transferred to the Koonwarra South Gippsland Highway project. He was notified of his redundancy from that project in July 2022 but this was retracted and he was transferred to the Monash Project. He commenced on the Monash Project in or around August 2022. His duties “had a particular focus on health & safety.”[2]
Mr Feeney attended the meeting with management on 15 September 2022.
On 16 September 2022 Mr Feeney received a document detailing the Respondent’s current projects which he understood he could transfer to.
On 19 September 2022 Mr Feeney attended a meeting with other trades employees and the Respondent where employees were advised that some employees would be made redundant. He was then given a letter advising him that he was redundant effective that day.
Terrence Lee
Mr Lee says he received a call from a Mr Nathan Sheen to see if he was interested in working on the Monash Project. He subsequently commenced employment on 30 November 2020, working as a construction worker Level 3. In April 2021 he was the elected Health & Safety representative (HSR). Mr Lee was based at the O’Shea Road site from January 2021.
On 15 September 2022 Mr Lee attended the meeting between employees on site and the Respondent.
On 16 September 2022 Mr Lee was provided with a document detailing various other projects of the Respondent. He was asked to take the list back to other workers on site which he did.
On 19 September 2022 Mr Lee attended a meeting with other employees where they were advised that the search for redeployment opportunities was unsuccessful and they needed to make some employees redundant. He said he was approached by Ms Brewis who gave him an envelope. He said “see you later” to Ms Brewis and left.
Antonio Rossi
Mr Rossi commenced working on a casual basis for the Respondent on the Monash Project in November 2020. In February 2022 he became a direct employee of the Respondent. In March 2022 Mr Rossi became a deputy HSR.
Mr Rossi undertook labouring work on night shift.
Mr Rossi did not attend the meeting on 15 September 2022.
On 19 September 2022 Mr Rossi attended a pre-start briefing where staff were advised on the work that was happening that night. After the pre-start meeting Mr Rossi was called to a meeting with Ms Brewis and others where he was “advised that his services were no longer required.”[3] He said he was shocked as he wasn’t aware his employment might end.
James Spencer
Mr Spencer commenced on the Monash Project in early 2020 as a labourer. He was elected as a HSR in 2020.
Mr Spencer said that in September 2022 he was contacted by employees on the site expressing concerns about rumours of redundancies. He contacted Lou Galgano (Project Superintendent) and requested a meeting between management and staff. This meeting was called for 15 September 2022. Mr Spencer attended that meeting.
Mr Spencer said that on 19 September 2022 he attended a pre-start briefing. During the meeting he (along with other trades employees) was directed to attend the Ferntree Gully Road compound where management addressed employees and advised them that the Respondent had exhausted all avenues for alternative employment and, while a small number of employees would be retained, others would be made redundant. Mr Spencer was called into an individual meeting and advised he would be made redundant effective that day.
Knowledge of the Monash Project winding down
Each of the Applicants has had extensive experience working in the construction (building and/or civil) sector doing work on a project basis.
The Applicants, when questioned as to their experience with projects winding down, gave evidence that their familiarity with the industry meant it was clear to them when a project was nearing completion. Mr Reed said that he has “been around long enough in the industry to know [when a project is nearing completion]”[4] and Mr Lee agreed that workforce changes are an “unavoidable aspect of project based work”[5]. The Applicants agreed that they observed the project work being completed and understood the project was winding down, without needing to be told so by management.[6] Mr Reed[7] and Mr Feeney[8] both had worked for the Respondent on previous projects and had been transferred to the Monash Project after those projects wound down.
The Respondent submits that the winding down of the project was obvious to each Applicant because of their experience, but additionally their understanding as developed over a series of meetings in September 2022.
2 September 2022 – Discussion between Mr Spencer, Mr Lee, Mr Galgano and Mr Munzenberger
Mr Munzenberger gave evidence[9] that, on 2 September 2022, he was on site when Mr Lou Galgano (Project Superintendent) called him into a meeting he was having with the Respondent’s Health and Safety Manager, Mr Spencer and Mr Lee.
Mr Spencer asked Mr Munzenberger “What’s going on?...We want a straight answer about future work with you guys” which Mr Munzenberger took to be a reference to the winding down of the Monash Project. He responded to Mr Spencer that “the job is coming to an end” and advised that “it looks as though we will need 4 to 6 people to finish the job”.[10]
Mr Lee gave evidence that he could not recall this meeting although said it was possible it did happen.[11]
Mr Spencer gave evidence that he was part of the discussion but that it was not an “official meeting”[12]. Mr Spencer’s evidence was that Mr Munzenberger said that the Respondent was “looking to shrink the workforce” and that was all that was being assessed at the time. Mr Munzenberger’s evidence was that he did not say anything was confirmed but rather that he said “At the moment this is probably what we’re going to be looking at going forward.”
In relation to the number of employees required going forward, Mr Spencer gave evidence that he did not believe Mr Munzenberger had said “four to six [employees]” would be required. He said “I thought he said six to eight but then I think I've written down in that meeting I held later six or something, yes. But yes, it was a small number”[13] to which Mr Spencer said that he told Mr Munzenberger that the Respondent would need to find jobs for the other nine employees.
I accept the evidence that a reduction in the workforce required on the Monash Project was discussed at this meeting. Not much turns on whether the reduction was to four or six, or six to eight employees.
7 September 2022 - Health and Safety Committee meeting
On 7 September 2022, a Health and Safety Committee meeting was held. Mr Lee and Mr Spencer attended the meeting as the elected HSRs, along with attendees from the Respondent including Mr Galgano and Mr Munzenberger. Minutes of the meeting that were posted in the ‘crib shed’[14] onsite reflect that a key discussion was as follows:
“Brief on upcoming works program and proposed change to current [designated work groups (DWGs)]. As the project has significantly reduced in size and the remaining works program relies on small workgroups with minimal concurrent activities ~ It was proposed that the current East, West, Central & O’Shea be merged into a single project DWG.”[15]
Mr Spencer and Mr Lee agreed in cross-examination that during the meeting the Respondent gave an update about “the upcoming works program”[16] and made a proposal to “reduce the number of designated work groups, effectively merging four of them into one”[17]. Mr Spencer agreed that (at least one) rationale for this proposal was due to the reduced project size[18] and Mr Lee agreed that one of the reasons would be that “the project activities were winding down”[19]. Mr Lee also gave evidence that both he and Mr Spencer had been informed of the proposal by Mr Galgano “sometime earlier”.[20]
Although the other Applicants were not in attendance at the meeting, it was the usual practice for the minutes to be posted in the crib shed where employees could see what had been discussed. A note on the minutes recorded that the HSRs were to “review proposed change and provide feedback” by 12 September 2022.
14 September meeting of employees
On 14 September 2022, an authorised meeting of workers was convened by Mr Spencer. Mr Reed was in attendance.[21] Mr Feeney appears to have signed the attendance sheet but on cross examination explained that he did not meaningfully participate in the meeting as he was having discussions with other workers at the time.[22]
Mr Spencer called the meeting as an opportunity to hear the concerns of employees who “were stressing out”[23] because the project was winding down and they were afraid about the security of their future employment with the Respondent.[24] Mr Spencer maintained in cross examination that the concerns of the workers did not cause him to wonder if he himself would be made redundant.[25]
The minutes of this meeting were posted on the wall in the crib shed.[26] These notes say, in part:
…Jaimie addressed meeting re conversation had with Lou + Munz re end of job >> 6 people to finish job… [27]
Mr Spencer gave evidence that he told the workers at this meeting that he had spoken to Mr Galgano and Mr Munzenberger on 2 September 2022 about the project coming to an end and the workforce shrinking but that no firm or estimated time frames had been discussed.[28] Mr Munzenberger’s evidence is that on 2 September he had said that four to six employees would be required.[29] In cross examination Mr Spencer conceded that whether four to six, or six to eight employees as he had believed, it was a small number of employees.[30]
At the conclusion of the meeting, Mr Spencer sent a copy of the attendance sheet and the minutes taken to Mr Galgano and Mr Munzenberger.[31]
Meeting of 15 September 2022
On 15 September 2022 the Applicants (with the exception of Mr Rossi) attended a meeting with the Respondent to address rumours of redundancies on site. What occurred at this meeting is in dispute.
Between 11 and 15 employees of the Respondent were present. Management representatives present included Ms Brewis, Mr Munzenberger, Mr Galgano, Phil Mirigliani (Supervisor), Erin Lack (Human Resources Advisor) and Coby Weetra (Indigenous & Social Inclusion Advisor).
Mr Spencer said that employees expressed their concerns to management about their mental health and increased stress levels over ongoing rumours of redundancy.
The Applicants (except for Mr Rossi) each gave evidence that Ms Brewis said repeatedly[32] or seven times[33] or more[34] that no redundancies would take place and that the Respondent’s intention was to provide redeployment opportunities to all employees.[35]
Ms Brewis gave evidence that at the meeting she told those present that the Monash Project activities were winding down, that staff were demobilising and that there would only be a need for ad-hoc and non-continuous work. She also said that the Respondent was actively seeking opportunities for continuous work on other projects and that redundancy would be a last resort. She said that if there were any specific projects of interest to any employees the Respondent would investigate those opportunities.[36]
Ms Brewis specifically denied that she said that workers would not be made redundant. Rather, her evidence was that she said several times that “while redundancies were being considered, [the Respondent] was exploring redeployment options and that was [the] main priority.”[37]
It is not in dispute that the Respondent agreed to provide a list of current ongoing projects to the employees and that this was provided on 16 September 2022. While Ms Brewis said no-one indicated an interest in any specific project I accept that:
· at 7.38am on 19 September 2022 Mr Feeney sent an email to the Respondent in which he sought “to be transferred to the north east link project on completion of the monash or earlier if possible”.[38]
· at 2.15pm on 19 September 2022 Mr Reed emailed the Respondent and indicated he would like a transfer to the North-East Link project as a “peggy”,[39]
I have considered the contested evidence given in relation to this meeting. For the reasons that follow I prefer the evidence of Ms Brewis to that of each of the Applicants.
Firstly, that Ms Brewis would give such an undertaking is inconceivable in circumstances where she knew it was a guarantee she could not possibly give. The uncontested evidence of Ms Henderson is that she and her team, in July 2022, commenced searching across the Respondent’s various projects for work that the Applicants may be able to be redeployed into and that this was without success. She communicated this to Ms Brewis and to Mr Munzenberger, who was also present at the meeting on 15 September 2022. Mr Munzenberger was not questioned as to what was said at the meeting in relation to redundancies. For Ms Brewis to have given such an undertaking would have been contrary to this advice. Ms Brewis gave her evidence in a thoughtful and honest manner. Further, it was not put to her that her recollection of what she said at the meeting was incorrect, she had said there would be no redundancies and that evidence to that effect would be given by the Applicants.
Secondly, in cross examination each of the Applicants conceded that Ms Brewis had said “the project has a start date and it’s coming to an end”[40], that “redeployment was CPB’s preference”[41], that “Ms Brewis didn’t at any time guarantee that people would be redeployed”[42] and that “redundancies were not on the table and being considered at that stage”[43]. Mr Feeney agreed that “it would not make sense for Ms Brewis to say that in circumstances where redeployment options were still being explored”[44].
I am therefore satisfied that Ms Brewis did not advise the Applicants or other workers at the meeting on 15 September 2022 that there would be no redundancies. I accept that she advised that redundancies would be a last resort and that the Respondent was hoping to redeploy the workers.
Even if I am wrong on this, for the reasons given below, it does not adversely affect my findings.
Genuine redundancy
The Respondent says that the termination of the Applicants’ employment were genuine redundancies and, for this reason, the Applicants were not unfairly dismissed.
Section 389 of the FW Act states:
389 Meaning of “genuine redundancy”
(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.
(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:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.
I have considered each of the matters required under s.389.
Did the Respondent no longer require the Applicants’ jobs to be performed by anyone because of changes to the operational requirements of the Respondent?
The Applicants no longer take issue with this matter.[45]
This however does not remove the Commission’s obligation to make a finding in this respect.
Ms Brewis assumed her role as Project Director on the Monash Project in March 2022. As part of her role she was required to monitor labour needs on the Project.
Ms Brewis’ evidence is that in August 2022 there were approximately 97 blue collar (trade) workers on the project made up of direct hire employees, labour hire and contractors. At this stage Ms Brewis said a “significant number” of key milestones on the project had been completed. By the beginning of September 2022 between 95% and 98% of the Monash Project works were complete and there were only 26 blue collar workers (trades) on site made up of direct hire, labour hire and contractors.[46]
In her discussions with senior Monash Project personnel Ms Brewis said that it was determined that given only a small amount of work was left to be performed and that this would be ad-hoc and non-continuous in nature, it would only be necessary to have four direct hire blue collar employees on site.
As a result of having reached this conclusion a process for determining redundancies was put in place.
The Applicants’ evidence is that, as outlined above at paragraph [33], due to their experience in the industry, they were each well aware of the life cycle of project based work including that the workforce on any given project shrinks as the project nears completion.
Taking into account the evidence before me I am satisfied that the Respondent no longer required the Applicants’ jobs to be performed by anyone because of changes in the operational requirements of the Respondent on the Monash Project.
Has the Respondent complied with the consultation obligations in the Award or Agreement that applied to the Applicants’ employment?
The Respondent submits that it has complied with the consultation obligations in the Agreement. In particular the Respondent relies on clause 2.3.9 of the Agreement (set out above at paragraph [12]) which excludes from the definition of “major change” (for which consultation is required) demobilisation of employees related to the customary completion and winding down of project activities. The Respondent submits that the winding down of the Monash Project comes within the scope of this exclusion from “major change” and therefore was not required to consult employees under the terms of the Agreement.
Further, the Respondent submits that, even if such demobilisation is not excluded from the consultation obligations it has, by its actions, fulfilled the consultation obligations. This, it says, was achieved through the discussion with the workforce on 15 September 2022 in which it outlined the changes in the requirements on the project and the attempts to identify alternative work for the Applicants.
As to the Applicants’ submission detailed below, the Respondent says that the Applicants improperly conflate what constitutes “major change” with what is “likely to have a significant effect on employees”. The Respondent submits that it must be determined in the first instance if a major change has occurred and, it is only if this is found to be the case, should it then be determined if that major change is likely to have a significant effect on the employees concerned.
The Applicants submit that the term “demobilisation of employees” as used in clause 2.3.9 of the Agreement is not defined elsewhere in the Agreement. Further, they submit that there was a “major change” as envisaged by clause 2.3.1(a) and defined in clause 2.3.9(a) of the Agreement.
The Applicants submit that what occurred on the Monash Project was a major change that had a significant effect on employees (in that they lost their jobs). They submit that it is abundantly clear, on their evidence, that the Respondent failed to meet its consultation obligations under the Agreement. The Applicants submit that, at the meeting on 15 September 2022, the Respondent specifically ruled out redundancies a number of times and advised the Applicants that they could express interest in redeployment to other projects of the Respondent both in Victoria and nationally. On 19 September 2022 the Applicants were advised that they were redundant.
The Applicants submit that, even if they are wrong in relation to obligations under the Agreement, the Respondent had obligations by virtue of the operation of the FW Act. In particular, the Applicants submit that s.205 of the FW Act requires that all Agreement must contain a consultation term that provides for consultation on major change that has a significant effect on employees. If an agreement does not contain such a clause the model consultation term found at Schedule 2.3 of the Fair Work Regulations 2009 (Regulations) is taken to be a term of the Agreement.
The Applicants submit that the Agreement consultation clause does not meet the requirements of s.205 of the FW Act (in that excludes the circumstances of the type that led to the redundancies of the Applicants) and therefore the model consultation clause must be taken to be a term of the Agreement. Under that term the Respondent had an obligation to consult which it did not fulfil.
Consideration
Is there an obligation to consult pursuant to clause 2.3 of the Agreement
Clause 2.3 of the Agreement contains the following provisions relevant to the consultation obligations that may be binding on the Respondent.
The Agreement, as is relevant for the matter I must decide, states, at clause 2.3:
2.3.1 This term applies if the employer:
(a)Has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees or
(b) Proposes to introduce a change to the regular roster or ordinary hours of work of employees.
…
2.3.9In this term, a major change is likely to have a significant effect on employees if it results in:
(a) The termination of the employment of employees, or
(b) Major change to the composition, operation or size of the employer’s workforce or to the skills required of employees, or
(c) The elimination or diminution of job opportunities (including opportunities for promotion or tenure), or
(d) The alteration of hours of work, or
(e) The need to retrain employees, or
(f) The need to relocate employees to another workplace, or
(g) The restructuring of jobs.
Change including demobilisation of employees related to the customary completion and winding down of project activities does not constitute major change.
A plain reading of the wording of clause 2.3.1 indicates that the obligation to consult in the matter before me will only arise:
1. Where the Respondent has made a definite decision to introduce a major change to production, program, organisation, structure or technology and
2. Where that major change is likely to have a significant effect on employees
The first observation to make is that a significant effect on employees of some change at the enterprise does not mean that there is a requirement to consult. This is because, firstly, the change must be major change and that major change must be to production, program, organisation, structure or technology and that change is likely to have a significant effect.
That is, the major change must first be identified. Second whether that major change is to production, program, organisation, structure or technology must be determined and thirdly the significant effects must exist. Only then is the obligation to consult enlivened. That something may have a significant effect on some employees does not generate the requirement to consult under the clause. This is to read the clause incorrectly.[47]
Further, as is made clear in clause 2.3.9 of the Agreement (which outlines examples of significant effects) and, apparently to avoid a future dispute over the matter, major change does not include demobilisation of employees related to the customary completion and winding down of project activities (the demobilisation carve out).
Whilst this clarification of what is major change is included in the sub-clause in relation to significant effects, by its language it clearly is intended to operate in relation to paragraph 2.3.1(a) of the Agreement.
If the change is “demobilisation of employees related to the customary completion and winding down of a project” then the change is not major change and the obligations in clause 2.3 of the Agreement are therefore not enlivened.
On the evidence given in these proceedings of both the Respondent and Applicants I am satisfied that what occurred that gave rise to the redundancies of the Applicants is the demobilisation of employees related to the customary completion and winding down of a project.
The Applicants variously gave evidence that they were generally aware of the Monash Project coming to completion – or at least that part of Monash Project they were working on (even if it had not fully been completed). Ms Brewis gave evidence, which was not challenged and is accepted by me, that the project had reached 95-98% completion at the beginning of September 2022.[48]
In these circumstances the obligation to consult with the Applicants (and other employees) under the terms of the Agreement did not arise.
I do not consider that the Applicants’ (oblique) reference to “demobilisation” not being defined in the Agreement has any impact on my analysis above. It is a term commonly used on large projects to indicate some particular stage where employees on the project are moved on in some way, including off the project. The dictionary definition of “demobilise” is to disband.[49] In the context of a civil construction project it would appear the term is used in the context of disbanding of the workforce. In any event, in this case that “demobilisation” clearly relates to the reduction in workforce requirements.
Does clause 2.3 of the Agreement comply with the requirements of s.205 of the FW Act
The Applicants submit that, even if they are wrong in relation to the requirement to consult pursuant to clause 2.3 of the Agreement, clause 2.3 of the Agreement does not meet the requirements of s.205 of the FW Act and, for that reason, the model consultation term in Schedule 2.3 of the Fair Work Regulations 2009 (Regulations) applies.
Section 205 of the FW Act states that:
205 Enterprise agreements to include a consultation term etc.
Consultation term must be included in an enterprise agreement
(1)An enterprise agreement must include a term (a consultation term) that:
(a) requires the employer or employers to which the agreement applies to consult the employees to whom the agreement applies about:
(i) a major workplace change that is likely to have a significant effect on the employees; or
(ii) a change to their regular roster or ordinary hours of work; and
(b) allows for the representation of those employees for the purposes of that consultation.
(1A) For a change to the employees’ regular roster or ordinary hours of work, the term must require the employer:
(a) to provide information to the employees about the change; and
(b) to invite the employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities); and
(c) to consider any views given by the employees about the impact of the change.
Model consultation term
(2)If an enterprise agreement does not include a consultation term, or if the consultation term is an objectionable emergency management term, the model consultation term is taken to be a term of the agreement.
(3) The regulations must prescribe the model consultation term for enterprise agreements.
Section 205 of the FW Act does no more than require that an enterprise agreement contain a term that requires the employer to consult about a major workplace change that is likely to have a significant effect on the employees.
Clause 2.3 of the Agreement does that. It is not apparent – and this is the nub of the Applicants’ submissions – that the demobilisation carve out related to the customary completion and winding down of the project does make clause 2.3 of the Agreement contrary to s.205 of the FW Act.
The Applicants made no submissions and provided no documentary or other evidence in support of their proposition that that the demobilisation carve out in clause 2.3 of the Agreement was enough to make the clause not conform with the requirements of the s.205 of the FW Act (it being the only difference between the Agreement and the model consultation term). It is not sufficient to make such a claim but provide no basis on which it can be considered by the Commission or responded to by the other party to proceedings.
In reply, the Respondent submits that what occurred on Monash Project, in any event, was not a “major change”.
In Port Kembla Coal Terminal v CFMEU[50] (Port Kembla) the Full Court of the Federal Court was hearing an appeal by Port Kembla against a decision at first instance where the primary Judge held that the termination of three employees was a major change which placed an obligation on the employer to consult.
On appeal Jessup J (with whom White J agreed) outlined at paragraphs 183-184 a brief history of the origins of the consultation clause in the relevant agreement. His Honour then said:
185 As it happens, I would not regard the present as the occasion to go beyond the point of deciding whether the primary Judge was in error to have held that the circumstances leading to the termination of the employments of Mr Giddings, Mr Rosewarn and Ms Arber amounted to “major change” within the meaning of cl 7.1 of the Agreement. In my respectful view, his Honour was.
186 Commencing with the first of the two ways in which his Honour characterised those circumstances, I do not agree that a “change” of this kind would amount to a change to “production, program, organisation, structure, technology, shift arrangements, work organisation or the level of outsourcing”. Only by a very strained reading of the words could the change identified by his Honour be so described. On appeal, counsel for the respondents submitted that the change was to “organisation”, but, save to propound the point, they really advanced no focussed argument as to how it was so. The change identified by his Honour was not, in my view, a change in organisation.
187 As to the second of the two ways in which his Honour characterised the circumstances leading to the termination of the employments of these three employees, again I do not, with respect, agree that the occurrence of a “forced redundancy” makes the underlying, or corresponding, change a “major” one. If many employees were to be made redundant, there may well have been a major change with which those redundancies were associated, but the size and importance of the change would have to be assessed by reference to facts which went beyond, although they may include, the facts of the redundancies. In the present case, it is enough to reiterate that the forced redundancy of three employees out of a workforce of about 98 did not of itself constitute a major change within the meaning of cl 7.1.
The demobilisation carve out in the Agreement would appear to be no more than a reflection of this finding.
I agree with the submissions of the Respondent. What happened on the Monash Project was not the introduction of any major change to “production, program, organisation, structure or technology” on the Monash Project by decision of the Respondent. Rather, it was the natural winding up of the Monash Project because the works were completed. That there is a small amount of work still to be done does not take the matter any further. This is reflected in the retention of 3 or 4 workers on site. As it is well established, the issue of how employees were chosen for redundancy is not a relevant consideration in determining if the redundancies are genuine redundancies.[51]
In accepting the arguments of the Respondent in this respect I note that the Applicants’ submissions did not canvass the decision in Port Kembla or its implications for the matter before me.
In Berkley Challenge v United Voice[52] the Full Court of the Federal Court heard appeals in relation to two separate decisions which canvassed the obligation to make redundancy payments pursuant to s.119 of the FW Act and the meaning of the exception to that obligation where the redundancy arose from the “ordinary and customary turn over of labour.” Justices Collier and Rangiah found:
214 We are satisfied that, in the context of the Exception to s 119(1)(a), “ordinary and customary turnover of labour” has the meaning explained by the primary Judge in [2019] FCA 9 at [132]-[133]. “Ordinary and customary turnover of labour” connotes a termination where the employer no longer requires the job to be performed because termination in the particular case is common or usual, both in the sense that it is commonly observed and in the sense that it is habitual or of longstanding practice.
Their Honours then set out a number of matters they saw as relevant to deciding if, in any particular case, there was a “customary and ordinary” turnover of labour. The relevant factors include the expectations of employees, whether it was the normal feature of the business, the nature of the job to be performed and whether the event of termination is unusual.
Whilst what was considered in Berkley Challenge was a broader term than contemplated by the “customary completion and winding down” of a project, and it was determined in the context of the exception in s.119 of the FW Act such that it is therefore not binding on me, there are similarities that provide some persuasive guidance in the matters currently before me.
For these reasons I am not satisfied that the inclusion of the demobilisation carve out of what constitutes major change in clause 2.3 of the Agreement renders that clause inconsistent with s.205 of the FW Act such that the model consultation term in the Regulations should be taken to be a term of the Agreement.
Conclusion
I am not satisfied that there was a requirement to consult with employees in relation to the redundancies that occurred on 19 September 2022.
However, I wish to make some observations in relation to engagement between the Respondent and workers on the Monash Project over the few months prior to the redundancies. I accept that the Applicants were not naïve in relation to the demobilisation process that occurs on construction projects. I also accept that they were generally aware of the attrition of staff on the Monash Project as the works wound down such that the ultimate conclusion of their employment on the Monash Project could not have come as a surprise to them. However, sound management practice would be to have ensured workers on the site were regularly briefed as to the anticipated end date of the works and of the attempts being made at the administration level to identify potential work on other projects or the consequences if alternative work could not be found.
That the Respondent waited until four days prior to the handing of redundancy notices to the Applicants and others on site to formally advise that the Monash Project was winding down is not, in my view, sound or appropriate modern management practice. It is something the Respondent may wish to review in terms of its communication with workers when projects are entering the wind down stage.
Would it have been reasonable to redeploy the Applicants to the Respondent’s enterprise or a related entity?
The determination of if it would have been reasonable in all of the circumstances to redeploy the Applicants requires the identification of suitable positions or work to which the Applicants could have been redeployed, taking into account their skills and experience, at the time they were dismissed. Such a finding must be made on the basis of all the relevant circumstances and on an appropriate evidentiary basis.[53]
It is therefore necessary, if I am to find that it was reasonable in all of the circumstances to redeploy the Applicants, to identify, on the basis of the evidence before me, that there was a job, position or other work for each of the Applicants to perform.
The evidence of Ms Henderson is that, while attempts were made to identify work suitable of the Applicants none could be found and that, on the 4 projects in which the Respondent had an involvement in Victoria (excluding the Monash Project) there were only 2 trades employees directly employed by the Respondent.[54]
The Respondent submits that, on the basis of the evidence before the Commission, the Commission could not conclude that it was reasonable in all of the circumstances to redeploy the Applicants.
The evidence of the Applicants as to positions to which they may be redeployed goes no higher than some of them having randomly observed in passing some work being done on the Monash Project that may have involved a contractor driving a vehicle marked with the Respondent’s logo[55] or that there were some workers kept on the Monash Project when they were dismissed.[56] Indeed, Mr Reed conceded that the last time he was on the project site was 19 September 2022.[57]
The Applicants submit that they “all had significant previous experience on construction based project work”[58] and “should have been considered to perform” the ongoing work on the Monash Project identified by Ms Brewis as being undertaken by subcontractors. They suggest that, had proper consultation been undertaken, the Applicants skills and ability to complete on-going work would have been identified. This would appear, however, to go the question of the process of selection for redundancy, a matter discussed above at [100].
The evidence before the Commission does not disclose the existence of any positions – even at a general level – to which the Applicants could have been redeployed. The expression of interest in particular projects does not disclose the existence of work or jobs that could be performed.
The evidence before the Commission does not support a conclusion that there were positions to which the Applicants could have been redeployed or work that they could have performed. Even if the Applicants could have performed the work being undertaken by contractors (the evidence does not support this) the evidence before the Commission does not allow a conclusion that this work or the jobs were on-going in nature.
The assertion in submissions of the Applicants does not overcome the lack of evidence.
I note that orders for the production of documents by the Respondent in relation to any advertisements for or recording of vacant positions of the Respondent at Construction Worker 1, 2, 3 or 4 in the period September – October 2022 were issued by the Commission. In reply the Respondent indicated that there were no documents of this kind. This “nil return” on the order was not disputed by the Applicants. Further, no work or positions that the Applicants could have been redeployed to was identified by the Applicants.
For these reasons I am satisfied that it would not be reasonable to redeploy the Applicants to the Respondent’s enterprise or a related entity as the evidence does not disclose the existence of such positions.
CONCLUSION
For the reasons set out above I am satisfied that the dismissal of each of the Applicants was a genuine redundancy as defined in s.389 of the FW Act.
As I have found the dismissals to be a genuine redundancy by virtue of the operation of s.385 of the FW Act the Applicants have not been unfairly dismissed.
Each of the applications for unfair dismissal is therefore dismissed.
An order[59] to this effect will be issued for each application.
COMMISSIONER
Appearances:
S Miller of the Australian Workers Union for the Applicants
D Fleeton of K&L Gates and A Ermer for the Respondent
Hearing details:
2023.
Melbourne:
March 1 to 2.
Final written submissions:
Applicant, 30 January 2023
Respondent, 13 February 2023
[1] Respondent’s outline of submissions, paragraph 3.1, Court Book (‘CB’) p 27.
[2] Witness statement of Tony Feeney, paragraph 8, CB page 12
[3] Witness Statement of Antonio Rossi, paragraph 12, CB page 19
[4] Transcript PN672
[5] Transcript PN1199
[6] Transcript PN116 (evidence of Rossi), Transcript PN672 (evidence of Reed), Transcript PN1226 (evidence of Lee), Transcript PN1407 (evidence of Spencer)
[7] Transcript PN647
[8] Transcript PN914
[9] Witness statement of Michael Munzenberger, paragraphs 7-12, CB pages 58-59
[10] Witness statement of Michael Munzenberger, paragraph 9, CB page 59
[11] Transcript PN1269-1270
[12] Transcript PN1426
[13] Transcript PN1436
[14] Transcript PN738
[15] Minutes of Meeting on 7 September 2022, CB page 61
[16] Transcript PN1271
[17] Transcript PN1277
[18] Transcript PN1457
[19] Transcript PN1286
[20] Transcript PN 1287
[21] Transcript PN722, PN1292
[22] Transcript PN1000
[23] Transcript PN727
[24] Transcript PN729
[25] Transcript PN 1444
[26] Transcript PN733
[27] Minutes of Meeting on 7 September 2021, CB page 63
[28] Transcript PN1448
[29] Witness Statement of Michael Munzenberger, CB page 60
[30] Transcript PN1436
[31] Witness Statement of Michael Munzenberger, CB page 60
[32] Witness statement of Andrew Reed, paragraph 13, CB page 10; Tony Feeney, paragraph 11, CB page 13
[33] Witness statement of Terrence Lee, paragraph 15, CB page 16; James Spencer, paragraph 13, CB page 21
[34] Transcript PN1314 (evidence of Mr Lee)
[35] Witness statement of Andrew Reed, paragraph 13, CB page 10; Tony Feeney, paras 11-12, CB Page 13; Terrence Lee, paragraphs 13-14, CB page 16;
[36] Witness statement of Katherine Brewis paragraph 34, CB page 41
[37] Reply witness statement of Katherine Brewis, paragraphs 3-6 and 10, CB pages 142-144
[38] Witness statement of Katherine Brewis, annexure KB-4, CB page 57
[39] Witness statement of Katherine Brewis, annexure KB-4, CB page 57
[40] Transcript PN762 (evidence of Reed)
[41] Transcript PN789 (evidence of Reed)
[42] Transcript PN1324 (evidence of Lee)
[43] Transcript PN1505 (evidence of Spencer)
[44] Transcript PN1097 (evidence of Feeney)
[45] Transcript PN1642-1643
[46] Witness Statement of Katherine Brewis, paragraph 14, CB page 38
[47] See, for example, the comments of Jessup J in Port Kembla Coal Terminal v CFMEU [2016] FCAFC 99, [187]
[48] Witness Statement of Katherine Brewis, paragraph 14, CB page 38. The Applicants’ evidence was to varying degrees of completion but at earlier times
[49] Macquarie Dictionary (online at 14 March 2023) ‘demobilise’
[50] [2016] FCAFC 99
[51] UES (Int’l) Pty Ltd v Harvey [2012] FWAFB 5241, [26]–[27]
[52] [2020] FCAFC 113
[53] Technical and Further Education Commission T/A TAFE NSW v Pykett[2014] FWCFB 714, [24]-[26], [35]-[36]
[54] Witness statement of Tracey Henderson, paragraphs [16]-[17], CB pages 68-69
[55] Transcript PN962
[56] Transcript PN768
[57] Transcript PN770
[58] Transcript PN1673
[59] PR760373 (Reed), PR760376 (Feeney), PR760377 (Lee), PR760378 (Rossi), PR760380 (Spencer)
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