Bampton v Viterra Ltd
[2015] SASCFC 87
•16 June 2015
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
BAMPTON v VITERRA LIMITED
[2015] SASCFC 87
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Vanstone and The Honourable Justice Blue)
16 June 2015
EMPLOYMENT LAW - THE CONTRACT OF SERVICE AND RIGHTS, DUTIES AND LIABILITIES AS BETWEEN EMPLOYER AND EMPLOYEE
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - REPUDIATION - WHAT AMOUNTS TO REPUDIATION
EMPLOYMENT LAW - TERMINATION AND BREACH OF CONTRACT - TERMINATION BY OR AT INSTANCE OF EMPLOYEE
EMPLOYMENT LAW - TERMINATION AND BREACH OF CONTRACT - REDUNDANCY
Appeal against dismissal of action for redundancy payment.
The appellant Mr Bampton was employed by the respondent Viterra as Business Manager - Eyre Peninsula responsible for country and port operations on Eyre Peninsula. He was entitled to a redundancy payment if Viterra made a definite decision that it no longer required the job he was doing to be done by anyone and that decision led to termination of his employment.
In July 2010, Viterra decided to divide the responsibilities of the Business Manager - Eyre Peninsula between two Business Managers, one responsible for ports and the other for country operations. Mr Bampton’s immediate superior proposed to him that he retain responsibility for country operations with no change in his remuneration, working hours, status, seniority or reporting line to his superior.
Mr Bampton contended that this comprised a repudiation of his employment contract and in the circumstances he was entitled to a redundancy payment.
Held by Kourakis CJ dismissing the appeal.
1. Under the employment contract, Viterra was not entitled to vary Mr Bampton’s duties unilaterally by transferring responsibility for ports to another employee and accordingly expanding Mr Bampton’s responsibility for country operations (at [2]-[18]).
2. Mr Bampton did not purport to terminate the employment contract until 26 July 2010 (at [19]).
3. It is not necessary to decide whether Viterra repudiated its obligations under the employment contract (at [30]).
4. Mr Bampton was made redundant within the meaning of the redundancy term of the employment contract (at [42]-[44]).
5. Viterra’s decision did not lead to termination of Mr Bampton’s employment with the meaning of the redundancy term in the employment contract because it wished to continue to employ him in a different position and it was his own choice to resign or terminate the employment contract for repudiation (at [47]-[51]).
Held by Blue J (Vanstone J agreeing) dismissing the appeal.
1. Under the employment contract, Viterra was not entitled to vary Mr Bampton’s duties unilaterally by transferring responsibility for ports to another employee and correspondingly expanding Mr Bampton’s responsibility for country operations (at [153]-[154]).
2. Mr Bampton did not purport to terminate the employment contract until 26 July 2010 (at [166]-[168]).
3. Viterra did not repudiate its obligations under the employment contract (at [178]-[179]).
4. Observations on the meaning of redundancy when not defined in the employment contract (at [196]-[208]).
5. On the proper construction of the redundancy term of the employment agreement, the question whether the nature and degree of change in a job is such that the decision to make the change is to be assessed as the employer no longer requiring the job an employee has been doing be done by anyone involves an evaluative assessment of fact and degree (at [213]-[218]).
6. Mr Bampton was not made redundant within the meaning of the redundancy term of the employment contract and was not entitled to a redundancy payment (at [222]-[226]).
Employment Protection Act 1982 (NSW); Fair Work Act 2009 (Cth) ss 386; Income Tax Assessment Act 1936 (Cth) s 27A, s 27F; Industrial Conciliation and Arbitration Act 1972 (SA) ss 82, referred to.
Brackenridge v Toyota Motor Corp Australia Ltd (1996) 142 ALR 99; Campbell v Encyclopaedia Britannica Australia Ltd [2008] NSWSC 1178; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; Commissioner for Government Transport v Royall 116 CLR 314; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; Dibb v Commissioner of Taxation [2004] FCAFC 126, (2004) 136 FCR 388; Easling v Mahoney Insurance Brokers [2001] SASC 22, (2001) 78 SASR 489; Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286; Fishlock v Campaign Palace Pty Ltd [2013] NSWSC 531; Fosters Group Limited v David Kou Tien Wing 148 IR 224 [2005] VSCA 32; Gamboni v Bendigo and Adelaide Bank Ltd [2013] VSCA 92; Hawkins and another v Commonwealth Bank of Australia (1996) 70 IR 213; Hodgson v Amcor Ltd [2012] VSC 94, (2012) 264 FLR 1; Jones v Department of Energy and Minerals (1995) 60 IR 304; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61, (2007) 233 CLR 115; O’Connor v Argus and Australasian Ltd [1957] VR 374; Price v Mouat (1862) 11 CB(NS) 508, 142 ER 895; Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327; Reg v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-Operative Ltd and Others (1977) 16 SASR 6; Shevill v Builders Licensing Board (1982) 149 CLR 620; Short v FW Hercus Pty Limited (1993) 40 FCR 511; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors [2004] HCA 52, (2004) 219 CLR 165; UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436; Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401; Whittaker v Unisys Australia Pty Ltd [2010] VSC 9, (2010) 26 VR 668, discussed.
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; Amalgamated Metals, Foundry and Shipwrights Union v Broken Hill Pty Co Ltd, Whyalla(Termination Change & Redundancy Case) (1984) 8 IR 34; Bampton v Viterra [2014] SADC 170; Brackenridge v Toyota Motor Corp Australia Ltd (1966) 142 ALR 99; Commissioner of South Australia; ex parte Adelaide Milk Supply Cooperative Ltd & Ors (1977) 16 SASR 6; Commonwealth Bank of Australia v Finance Sector Union of Australia [2002] FCAFC 193, (2002) 125 FCR 9; Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; 209 CLR 95; Electrical Trades Union of Australia v A Burton and Sons (1984) 9 IR 115 (‘Termination Change and Redundancy Case’); Foran v Wight (1989) 168 CLR 385; Gromark Packaging v FMWU (1992) 46 IR 98; Lloyd v Brassey [1969] 2 QB 98; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; O’Meara v Stanley Works Pty Ltd [2014] SADC 170; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 218 CLR 451; Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28, 194 CLR 355; Royal Botanic Gardens and Domain Trust v South Sydney City Council [ 2002] HCA 5; (2002) 76 ALJR 436; Satellite Estate Pty Ltd v Jaquet (1968) 71 SR (NSW) 126; Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 3 WLR 356; Western v Union des Assurances de Paris (1996) 88 IR 259; Westfield Management Limited v AMP Capital Property Nominees Limited [2012] HCA 54, considered.
BAMPTON v VITERRA LIMITED
[2015] SASCFC 87Full Court: Kourakis CJ, Vanstone and Blue JJ
KOURAKIS CJ: I have had the advantage of reading in draft the judgment of Blue J and adopt his summary of the relevant facts and the litigation history. I too would dismiss the appeal but by a different route which I step through below.
Repudiation of Employment Contract
For the reasons given by Blue J I would hold that Viterra was not contractually entitled unilaterally to change Mr Bampton’s duties so as to limit his managerial responsibilities to Viterra’s country operations on Eyre Peninsula and to exclude from his employment duties its terminal operations. I make the following observations and some qualifications on my agreement with his Honour’s reasons.
Mr Bampton became the terminal manager for Port Lincoln in 1997. He was employed as the terminal manager until he took on the additional responsibility of managing the Thevenard port terminal and the country storage operations on Eyre Peninsula in April 2004.
The terms of Mr Bampton’s engagement in the position described as “Business Manager – Eyre Peninsula” (the Job) were recorded in a letter dated 15 June 2004 (the engagement letter). The engagement letter stipulated that his duties were those contained in a “Job and Person Profile”.
It is not known whether a “Job and Person Profile” was provided in June 2004 but Mr Bampton was provided with one in August 2007. The document was inaptly titled because it did not identify the actual duties the person who had the “Job” was expected to perform. Instead it set out certain “Expected Outcomes” in general, and largely meaningless, managerial terms. It was silent as to his particular management responsibilities for Viterra’s country and terminal operations on Eyre Peninsula.
Clause 6 of the engagement letter did contemplate that the “Job” was comprised of a collection of duties because it provided that Mr Bampton may be given additional duties over and above those set out in the “Job and Person Profile”. The utility of that clause was undermined by the failure to specify the duties attached to the job. Nonetheless, Clause 6 expressly records a term which, in its absence, would have been implied and which operates on whatever duties Mr Bampton carried out, as a matter of fact, when he was first engaged in the position.
It goes without saying, and it is necessary to give business efficacy to an employment contract, that an employee may be asked to perform additional, or fewer duties, than he or she is first employed to perform without changing the position or job in which he or she is engaged. The nature and organisation of an employer’s enterprise necessarily evolves over time and the duties of an employee may be called on to perform will vary accordingly. However, there are necessarily limits to the unilateral power of the employer to direct that an employee perform different duties to those he or she was engaged to perform. A contract to do a particular job cannot become a contract to do any job the employer may order. Such a contract of general servitude is inconsistent with an engagement to perform a particular job. There are several ways in which the limit may be expressed. For example the employer’s power may be limited to direct the performance of “reasonable additional”, or “incidental” or “closely connected” duties. These expressions entail an evaluative judgment, the substance of which I discuss further below.
The proposal to assign Mr Bampton to the role of “Business Manager – Country Operations” (the Country Operations Manager) only and to remove his responsibility for terminal operations involved a substantial change in his duties. The broad assessment of the Judge that Mr Bampton’s managerial duties were spread equally between country storage and terminal operations is a convenient shorthand indication of the narrowing of Mr Bampton's managerial role and the reduction in his reporting responsibilities. That measure broadly aligns with the removal of one of the two parts of the business he managed.
Over and above the quantitative reduction in Mr Bampton’s duties there was a qualitative change which was of equal importance. As the country manager Mr Bampton supervised the receiving of grain at harvest from farmers in local storages and the movement of that grain onto either trucks or trains for transport to a port terminal. The terminal operations were more complex.
The terminals under Mr Bampton’s supervision were Thevenard and Port Lincoln. Port Lincoln was the larger of the two. It had 400,000 tonnes of permanent capacity where as Thevenard had a permanent storage of 250,000 tonnes. Two million tonnes of grain was exported annually through Port Lincoln and 150,000 tonnes of grain was exported annually through Thevenard. Mr Bampton described the terminal operations as follows:
The terminal activities were much more involved, that involved receiving the grain, re-checking the qualities, storing it in a position ready to blend onto ships. It involved a much larger and much more permanent workforce that was more unionised than the up-country facilities where they were predominantly a casual and part time workforce. The terminals also involved a lot of activities relating to the ship loading with stevedores, ships, captains and masters. The terminals were accredited as an export premises with AQUIS [the national quarantine service]...
... there was a whole lot of legislation and rules and protocols surrounding that. It meant that the terminals had to act in certain ways; it had to keep a lot of records; it had to undergo a lot of rules and it had to undergo a lot of AQUIS inspections. If those rules and regulations were not met, it could jeopardise the shipment of grain from those terminals... they were also very stringent in relation to records of the grain hygiene and practices and training and a whole lot of other issues.
Mr Bampton testified that the port terminal operations generated much more revenue for Viterra than the country operations.
The substantial differences in responsibility, complexity and revenue between the operations for which Mr Bampton was responsible, as the Business Manager – Eyre Peninsula and those he would supervise as Country Operations Manager, are important in determining whether the new position and duties fell within the scope of his contract or entailed a variation to it.
The evaluation of whether a particular collection of duties falls within the scope of a contract of employment is not undertaken in abstract. It must be informed by the context of the relevant labour market. The context includes the employment structure of the employer’s enterprise, the worker’s position in that structure, and the evolution of both in response to prevailing economic, technological and industrial conditions. The context also includes the employee’s place in the labour market having regard to his or her profession, vocation, qualifications, skills and work experience (collectively job skills).
Changes in the organisation of a workplace may call for a worker to perform duties which serve the same purpose in the employer’s enterprise and fit the worker’s job skills but which are different to the duties which he or she performed when first engaged. On the other hand some changes may be inconsistent with an employee’s job skills. Just as the needs of the employer for flexibility must be considered so too consideration must be given to the interests of the employee in fully exercising his or her work skills so that they can optimise their prospects for advancement and continued employment in the labour market. Whether an employee’s additional or reduced duties remain within the scope of his or her position must be weighed against considerations such as these. It is not a purely quantitative exercise. Rather the question is whether the employee is performing a job of the same kind or character and at the same level.[1]
[1] O’Connor v Argus and Australasian Ltd [1957] VR 374; Brackenridge v Toyota Motor Corp Australia Ltd (1966) 142 ALR 99; Price v Mouat (1862) 11 CB(NS) 508; Easling v Mahoney Insurance Brokers [2001] SASC 22, (2001) 78 SASR 489; Commissioner for Government Transport v Royall (1966) 116 CLR 314 at 322-323.
In this case, the substantial qualitative and quantitative changes in Mr Bampton’s duties under the proposed restructure effected a demotion to a lesser managerial position. Mr Bampton correctly described the position as a “backwards step... into a diminished role”. I would find that an assignment of Mr Bampton to the position of country operations manager and the withdrawal of his duties as terminal manager would have breached his contractual engagement.
A worker facing a direction to perform duties which he or she is not engaged to perform can elect to affirm or repudiate the contract and claim damages. The quantification of those damages presents factual difficulties and, in any event, may be limited by the employer's right to dismiss on the giving of notice. However the damages issue does not arise in this case both because Viterra had not yet directed Mr Bampton not to perform his terminal managerial duties at the time that Mr Bampton purported to terminate his contract of employment and because Mr Bampton does not claim damages for being wrongfully denied the opportunity to perform the managerial duties associated with the port terminal operations.
It is important to observe here the legal significance of a finding that limiting Mr Bampton’s duties to those of the proposed country operations manager would have breached Viterra’s contractual obligation to provide him with duties as a port terminal manager. Employment is a common law relationship but its terms and conditions may be regulated by contract, and contractual rights and obligations may be superimposed over the rights and obligations which are found in the common law relationship of employment. Such is the connection between the contractual and employment relationships that when a worker is contracted to perform certain duties or a job, that collection of duties, or job, is also the service which the worker gives in the employment relationship.
It follows from the finding that Mr Bampton’s contractual engagement could not lawfully be limited to the duties of the proposed Country Operations Manager, that employment in that job would be employment in a different job to that of “Business Manager – Eyre Peninsula”.
For the reasons given by Blue J, I agree that Mr Bampton did not purport to accept Viterra’s alleged repudiation until 26 July 2010.
I mention first that on Friday 23 July 2010 Mr Hannon sent an email to Mr Bampton in which he made it clear that he would like to be in a position to confirm the proposed changes and establish a timeframe by Tuesday of the following week. It can be accepted that the new position had yet to be created and that there would have been some period of time after the Monday during which Mr Bampton would have continued to manage both the country and terminal operations. Nevertheless, the election which Mr Norman required Mr Bampton to make at the Monday meeting came with a time limitation which expired on Monday afternoon.
Mr Bampton’s email to Mr Hannon on Sunday 25 July 2010 at 10.37pm asserted that the company had made his position redundant but it was silent as to his continuing employment. The email also made a “claim” for a redundancy benefit but did not in terms effect any termination. The email did no more than foreshadow the matters that Mr Bampton intended to discuss the next day.
On Monday, Mr Hannon and Mr Norman discussed Mr Bampton's view of the contractual significance of the proposed changes. Mr Norman told Mr Bampton that his option was to either accept the proposed new position of country operations manager or resign. Mr Bampton sought an opportunity to obtain advice. It was agreed that he should have time to do so.
When they met again that afternoon Mr Bampton was accompanied by his solicitor, Mr Moloney. Mr Bampton contended that he was being terminated because the proposed country operations manager position effected a substantial reduction in his managerial responsibilities. Mr Norman on the other hand denied that Viterra had terminated Mr Bampton’s employment and asserted that it had no intention of doing so.
It was only after that meeting, at 4.22 pm, that Mr Bampton sent Mr Hannon the email purporting to accept Viterra’s alleged repudiation. In that email Mr Bampton referred to the choice he had been given to accept the new position or to resign and continued:
I decline to accept either of your choices. I would have been prepared to continue in my current position but you have confirmed that the company has already decided to abolish it. That amounts to a repudiation of my contract of employment with the Company, which I accept.
It is clear that by the time of the Monday meeting Viterra had decided to abolish the position of Business Manager – Eyre Peninsula and to cleave it into two new positions. It is also clear that the only position on offer to Mr Bampton was the position of Country Operations Manager. Viterra thereby unequivocally evinced an intention no longer to be bound by the contractual condition to employ Mr Bampton to manage both the country and terminal operations. At that time, Viterra were clearly on notice as to Mr Bampton’s position on the contractual significance of its decision. Moreover, by the afternoon meeting Mr Bampton had exercised his opportunity to obtain legal advice.
This was not a case like DTR Nominees Pty Ltd v Mona Homes Pty Ltd[2] in which the purchaser of land elected to remain silent as to its view of the vendor’s contractual obligations to procure and register a subdivision of the relevant land for almost five weeks after it had become aware of the vendor’s mistaken view. In DTR Nominees, at the last moment and before the vendor could take steps to perform the contract in accordance with the purchaser’s construction of the contract, the purchaser terminated for repudiation on the ground that the vendor had not proceeded with reasonable dispatch to perform its contractual obligation.
[2] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431-433.
The position which Mr Bampton had put to Viterra by email on Sunday, was repeated in the Monday morning meeting, and affirmed after he had obtained legal advice in the Monday afternoon meeting. Viterra, through Mr Norman, maintained its position even after Mr Bampton’s position had been clearly enunciated.
It can be accepted that the evidence does not show that Viterra would have summarily dismissed Mr Bampton if he had refused to resign. On the other hand nor does the evidence show that Viterra would have terminated Mr Bampton’s employment on four weeks notice. In the face of Mr Norman’s statement that Viterra did not intend to terminate Mr Bampton’s employment a finding cannot be made that Viterra would have terminated Mr Bampton’s employment with notice in accordance with the contract before directing Mr Bampton to report to work in Cummins as the Country Operations Manager. Viterra’s position was clear: Mr Bampton had only two alternatives - to accept his role or resign. If he did not resign, Viterra’s stated intention was to assign him only those duties which pertained to the new position of country operations manager. There were good reasons why Viterra might decide not to terminate Mr Bampton’s employment. It had good reason to believe that if it were to terminate Mr Bampton’s employment on four weeks notice after abolishing his position of Business Manager – Eyre Peninsula the redundancy clause would be enlivened.
Moreover, if Mr Bampton had refused to perform the duties of Country Operations Manager, he might lawfully have been dismissed for misconduct because those duties were a subset of his duties as Business Manager – Eyre Peninsula. The redundancy clause would not then have applied. For these reasons it is not possible to find that Viterra would have terminated Mr Bampton's employment with notice. Indeed the evidence of Mr Hannon supports a finding that Viterra intended to direct Mr Bampton to perform the duties of Country Operations Manager as soon as it appointed another person as terminal manager.
Be that as it may, it is strictly not necessary to decide this question. If Mr Bampton did not validly terminate his contract of employment by accepting Viterra’s repudiation, he nonetheless terminated it by resignation. Whether he validly accepted Viterra’s repudiation or resigned makes little difference to the application of the redundancy clause. If the redundancy clause applies to the termination of the relationship of employment by the unilateral conduct of an employee it can equally be said that Viterra’s decision to abolish Mr Bampton's position “lead” to his acceptance of its repudiation or to his resignation as the case maybe.
Redundancy Clause
I now turn to the terms of the redundancy policy which provided as follows:
Definition of Redundancy
An Employee’s position is redundant where the Company has made a definite decision that it no longer requires the job an Employee has been doing, be done by anyone (and this is not due to the ordinary and customary turnover of labour) and that decision leads to termination of the Employee’s employment.
Provision is then made for a redundancy payment which included five weeks notice and for a payment calculated on the basis of three weeks wages for every year of service:
A Permanent Employee with more than twelve months continuous service will receive at the time of his or her redundancy, termination payments calculated in accordance with the following:
Notice Period and Payment
· Four (4) weeks ordinary pay in lieu of notice (if applicable).
· The amount of notice will be increased by one (1) week if the employee is over forty-five (45) years old and has completed two (2) continuous years of service.
· An Employee may be required to work through all (or part only) of the notice period or the Company may make payment in lieu of the whole notice period (or the unworked balance of the notice period).
Redundancy Payment
For the purpose of redundancy, the calculation is as follows:
· Employees that have completed one year of continuous service but less than two years will be entitled to four (4) weeks ordinary pay.
· Employees that have completed two (2) or more years of continuous service will be entitled to (3) weeks per each completed year.
The maximum payment is capped at 104 weeks in total, inclusive of notice and severance payments.
The following clause covered a redundancy caused by a transmission of business:
In the event of a Transfer of Business, an Employee will not be entitled to any redundancy or severance payment, if the Employee receives an offer of alternative employment comprising of continuity of service and comparable salary and status.
It can be accepted that the history of redundancy provisions and the concept of redundancy in the Australian employment context informs the construction of the text of Viterra's redundancy policy but it is the text which remains paramount.
In reviewing the authorities on the concept of redundancy, their particular statutory and contractual contexts must be borne in mind. In R v The Industrial Commission of South Australia; ex parte Adelaide Milk Supply Cooperative Ltd & Ors (the AMSCOL case)[3] the question was the jurisdiction of the Industrial Court to include provisions governing redundancy awards. The question was whether redundancy fell within the concept of an industrial matter and the particular meaning of the word redundancy in s 82 of the Industrial Conciliation and Arbitration Act 1972 (SA). For that reason the discussion in the AMSCOL case of the meaning of the term is not determinative of the construction of Viterra’s redundancy policy. The same can be said of the definition employed in the Termination Change and Redundancy Case.[4] However, those authorities show that the purpose of redundancy benefits is to provide financial support to an employee who has lost the opportunity to earn wages because the employer has terminated his or her employment because it does not wish to employ any worker to do the job he or she once performed.
[3] (1977) 16 SASR 6.
[4] (1984) 9 IR 115.
The other cases referred to in argument must also be understood in their particular context. Importantly, in Jones v Department of Energy and Minerals[5] the meaning of redundancy arose in the context of a claim by Mr Jones that his dismissal was harsh, unjust and unreasonable. Mr Jones was not claiming a redundancy payment pursuant to a term of his employment or governing award. The Department of Energy and Minerals contended that the termination of Mr Jones’ employment was not harsh and unreasonable because Mr Jones’ position had become redundant. In Jones there was no function or duty left for Mr Jones to perform because of a reallocation of duties in the workplace. It was in that particular context that Ryan J held that there is a redundancy when no duties remain to be performed by the worker. Ryan J said:[6]
On Mr Jones’ evidence, this case would not satisfy that narrow definition of genuine redundancy, as some of his former duties were still being performed. However, it should be noted that Bray CJ’s description of what can constitute redundancy is not expressed to be exclusive. His Honour’s description was cast in terms of a ‘‘job’’ in the sense of a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee. However, it is within the employer’s prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Cooperative case.
In this case, the respondent led evidence of the major changes which were made to the Department between September 1993 and late 1994. According to Mr Downie, the applicant’s former position as Director, Mining Inspectorate, was abolished and the duties attached to it were combined with those of the previous Director, Environmental Management. In addition to a number of other, newly-created functions, those pre-existing duties were to be performed by a newly created General Manager, Mineral Operations. Thus, it is clear that although some of the tasks previously assigned to Mr Jones still had to be carried out, the employer’s rearrangement of its operational structure had the consequence that they be combined with other functions and performed by the holder of a new, more generally-oriented position.
[5] (1995) 60 IR 304.
[6] (1995) 60 IR 304 at 308.
I observe in passing that the references to the prerogative of the employer in the above passage must be read subject to the authorities on the power of an employer to direct an employee to perform work outside of the scope of his or her employment contract referred to in [14] above. More importantly, the passage reveals that the point made by Ryan J is that if the re-organisation had not redistributed all of Mr Jones' duties to existing employees, requiring, therefore, someone else to be employed to perform those duties, the Department of Energy and Minerals required a further reason, other than redundancy, to justify Mr Jones’ dismissal. Ryan J did not intend to so limit the concept of redundancy that those employees whose duties were redistributed to others on the termination of their employment would be ineligible for redundancy benefits. The passage therefore is not authority for the meaning of the word redundancy where it appears in a redundancy clause of an award or contract.
Hodgson v Amcor Ltd[7] did concern a claim for a redundancy payment. In Hodgson the Court held that there was no redundancy because Mr Hodgson’s former position of “General Manager of Fibre Containers” remained after Amcor’s managerial restructure. In that restructure one of six managerial positions was abolished and its responsibilities allocated to the five remaining positions including “General Manager of Fibre Containers”. Vickery J found that Mr Hodgson had not been made redundant and was not entitled to the generous redundancy benefits because Amcor had maintained his position but had decided to dismiss Mr Hodgson and to fill his position with one of the remaining five managers. As Vickery J found, Mr Hodgson was selected as the manager to be dismissed because of differences in management style, and clashes, between Mr Hodgson and his superior Mr Sutton.
[7] [2012] VSC 94, (2012) 264 FLR 1.
Whittaker v Unisys Australia Pty Ltd[8] concerned a claim to a redundancy payment made upon a proposed demotion in a company restructure. Ross J found that in proposing the demotion Unisys had evinced an intention not to be bound by the contract. There does not appear to have been a point taken in that case, as it is here, that the possibility of termination on notice displaced that intention. Be that as it may, Ross J found, relying on the decision in Jones, that because Mr Whittaker still had some of his duties to perform he had not been made redundant. In my respectful opinion, for reasons which are apparent in my discussion of the ratio of Jones, Ross J erred in his application of the decision in Jones, an unfair dismissal claim, to case in which a claim was made for severance payments on a clause of Mr Whittaker’s letter of engagement. In any event, I would treat the observations of Ross J as obiter because, even though his Honour rejected the contention that Mr Whittaker had been made redundant, his Honour upheld Mr Whittaker’s claim on the restructuring limb of the severance pay clause in that case. It is significant that in Whittaker, as in this case, the claim for redundancy payments was made after the employee unilaterally terminated both the contact, and position, of employment. It is the incongruity between the purpose of redundancy payments and their payment to an employee who unilaterally decides to forego his or her entitlement to wages which, in my respectful opinion, has led to an erroneously narrow view of the concept of redundancy. As will appear shortly there is, in my view, a sounder approach to the problem.
[8] [2010] VSC 9; (2010) 26 VR 668 at [95]-[96].
Returning to the text of the redundancy provisions. Viterra contended that there is a distinction between the words “position” and “job” in the definition clause. Viterra contended that an “employee’s position” is the totality of the service by that employee but that “the job an employee has been doing” is any one or more of the particular duties which comprise that service. I reject that submission. Both terms refer to the collection of duties which constitute the “position” or the “job”. An employee’s job is that collection of duties which his or her employer is entitled to direct him or her to perform and which he or she must stand ready, willing and able to perform in return for the payment of wages. A position in the service of an employer is a collection of duties and functions which the employer engages a worker to perform.
The purpose served by the “Definition of Redundancy” in Viterra’s redundancy policy is to identify when the “Redundancy Payments” become payable under that policy. If that drafting technique is removed and Viterra’s policy is stated more directly it is apparent that there is no difference between a “job” and a “position”. The clause would read:
Redundancy
[W]here the Company has made a definite decision that it no longer requires the job an Employee has been doing, be done by anyone (and this is not due to the ordinary and customary turnover of labour) and that decision leads to termination of the Employee’s employment: a Permanent Employee with more than twelve months continuous service will receive at the time of his or her redundancy, termination payments calculated in accordance with the following:
Notice Period and Payment
· Four (4) weeks ordinary pay in lieu of notice (if applicable).
· The amount of notice will be increased by one (1) week if the employee is over forty-five (45) years old and has completed two (2) continuous years of service.
· An Employee may be required to work through all (or part only) of the notice period or the Company may make payment in lieu of the whole notice period (or the unworked balance of the notice period).
“Where the Company ……… [the following payments shall be made:]
Not every change in the duties of an employee effects a change in the job of an employee or the redundancy of his or her position. However for the reasons given above, the proposed Country Operations Manager was not the same job or position as Business Manager – Eyre Peninsula. Plainly enough Viterra did not wish anyone to do the job of Business Manager – Eyre Peninsula.
This construction is, I think, made clear by considering how the clause would have operated had Mr Bampton’s employment been terminated by Viterra when the restructure was eventually put in place. Viterra may, for example, have decided that having both a terminal manager and country operations manager, the country manager need not be as well remunerated as Mr Bampton was. If Viterra had terminated Mr Bampton’s employment on four weeks notice after assigning others to the restructured positions, there can be no doubt that Mr Bampton would have been entitled to a redundancy payment: his termination by Viterra would have been the result of the abolition of his former position.
On Viterra’s construction the termination of a long serving senior executive after devolving his or her responsibilities to several junior employees is not a redundancy because the “job” is still being performed by others. That construction eviscerates the manifest purpose of Viterra’s redundancy provision. It is to be observed in this respect that in its second decision in the Termination, Change and Redundancy Case the Australian Conciliation and Arbitration Commission did not exclude reclassifications from the scope of redundancy provisions.[9] A construction which attempts to salvage some work for it to do depending on the extent to which the devolved duties approximate the dismissed employee’s former position gives the clause an arbitrary and uncertain operation.
[9] (1984) 9 IR 115 at 128.
The question remains whether Viterra’s decision to restructure the position of Business Manager – Eye Peninsula lead to the termination of Mr Bampton’s employment. On a literal construction of the word “leads” it imports a common sense causative test. On that approach if the redundancy provision is enlivened by the termination of an employment contract, an employee who, faced with an employer’s decision to direct the performance of duties which do not conform with its contractual obligation, terminates the employment contract by accepting the employer’s renunciation or fundamental breach, would appear to satisfy the causal link. So too would an employee who resigned by giving notice of termination of the contact in the face of the employers breach.
However the context requires a much narrower construction of the word “leads” as it is used in Viterra’s redundancy policy.
The word should be read down consistently with the concept of redundancy. I would hold that an employee’s decision to accept a repudiation or to voluntarily resign breaches the chain of causation. An employer’s decision to continue to employ a worker on the same terms and conditions but in a different job because it does not wish anyone to perform that worker’s former job has not “lead” to a termination of employment effected by the worker’s unilateral conduct. In effect that construction reads into the definition of redundancy, after the word termination, the words “by the employer”.
The construction I would give the provision accords with the industrial concept of redundancy. If an employer assigns an employee to a different position but on the same terms and conditions, the employer may have breached the contract of employment but neither the contract of employment nor the common law relationship of employment is terminated. Moreover, the employee remains entitled to ongoing employment on the same terms and conditions.
In O’Connor v Argus & Australasian Ltd[10] O’Bryan J, with whom Herring CJ and Gavan Duffy J agreed, explained that the relationship of employment can continue uninterrupted even though there is a succession of different contracts.[11]
[10] [1957] VR 374.
[11] Ibid at 384-388.
It is inconsistent with the very concept of redundancy for an employee to be entitled to redundancy payments, designed to financially support him or her until he or she finds new employment, by unilaterally taking the step which disentitles him or her from those wages.
In summary a position is abolished when the employer no longer wishes the collection of duties actually performed by an employee, or which the employee is bound, in law to perform, to be performed by anyone. However, that abolition only leads to the termination of an employee’s position within the meaning of Viterra’s redundancy clause when it is the employer’s unilateral action which terminates the employment.
Conclusion
I would dismiss the appeal.
VANSTONE J: I agree that the appeal should be dismissed. My reasons for so finding are encapsulated in the last five paragraphs of the reasons of Blue J.
BLUE J: This is an appeal against the dismissal by a District Court Judge of an action for a redundancy payment.
The plaintiff and appellant Ian Bampton was employed by the defendant and the respondent Viterra as Business Manager – Eyre Peninsula. He was responsible for country and port operations on Eyre Peninsula. It was a term of the employment contract that he was entitled to be paid a redundancy payment if the company made a definite decision that it no longer required the job he was doing to be done by anyone and that decision led to termination of his employment.
In May 2010, Mr Bampton sent a memorandum to his superiors suggesting that at his Business Manager level the Manager should be responsible for either ports or country operations but not both.
In July 2010, Mr Bampton’s immediate superior Mr Hannon informed him that Viterra had decided to divide the responsibilities of the Business Manager Eyre Peninsula between two Business Managers, one responsible for ports and the other for country operations. It was proposed that Mr Bampton retain responsibility for country operations and that responsibility for ports operations be transferred to a new Business Manager to be appointed. There would be no change in Mr Bampton’s remuneration, working hours, status, seniority or reporting line to Mr Hannon.
On 25 July 2010, Mr Bampton sent an email to Mr Hannon saying that he considered that his position had been made redundant and claiming a redundancy benefit. The next day, he sent an email to Viterra’s Human Resources Manager saying that Viterra had repudiated the employment contract and he accepted the repudiation.
The appeal raises the following questions:
1.Was Viterra entitled under the terms of the employment contract to vary Mr Bampton’s duties by transferring responsibility for ports to another employee and Mr Bampton correspondingly expanding his responsibility for country operations?
2.Did Mr Bampton purport to terminate the employment contract on 25 July 2010 or only on 26 July 2010?
3.Did Viterra by its conduct between 22 and 26 July 2010 renounce its future obligations under the employment contract so as to amount to repudiation?
4.What is the proper construction of the term of the employment contract dealing with redundancy?
5.Was Mr Bampton’s position redundant within the meaning of the definition contained in the redundancy term of the employment contract?
6.If so, did Viterra's decision lead to termination of Mr Bampton's employment?
Background
South Australian Cooperative Bulk Handling Limited (SACBH) was established some time before 1976 to receive grain into silos from growers in country South Australia, transport it to ports in South Australia and load it onto ships for transport to market.
Over time SACBH was renamed AusBulk Limited,[12] its business was taken over by ABB Grain Ltd[13] and ABB Grain was renamed Viterra Limited.[14] For convenience, I refer to these entities simply as Viterra.
[12] In the late 1990s or early 2000s.
[13] In September 2004.
[14] In September 2009.
Viterra divided its business operationally into two components: country and ports. The country component involved receiving grain from growers into silos situated in the country other than at ports; grading, mixing and managing it and transporting it to ports. The ports component involved receiving grain into silos at ports; grading, managing and mixing it; and loading it onto ships.
As at 1997, Viterra had a series of Country Managers, each of whom was responsible for the management of the country operations for a district. The districts included Western Eyre Peninsula, Eastern Eyre Peninsula, Northern Yorke Peninsula, Mallee and the South East. In turn, there were a series of Group Leaders, each being responsible for a local area including supervision of staff working in the local area, who reported to a Country Manager.
As at 1997, Viterra had a series of Terminal Managers, each of whom was responsible for the management of a port terminal. The ports included Port Adelaide, Outer Harbour, Port Lincoln, Thevenard, Port Giles, Wallaroo and Ardrossan.[15]
[15] At some point, one Terminal Manager became responsible for both Port Giles and Ardrossan. Much later, around mid 2010, one Business Manager became responsible for both Port Giles and Wallaroo. At some point, one Terminal Manager became responsible for both Port Adelaide and Outer Harbour.
As at 1997, Country Managers and Terminal Managers all reported to one Operations Manager based in head office in Adelaide.
Mr Bampton commenced employment with Viterra upon leaving school at the end of 1976. In early 1997, he became the Terminal Manager for Port Lincoln. At some point thereafter, his job title was renamed Business Centre Manager[16] as part of a change in title of all Terminal Managers and Country Managers to Business Centre Managers. This change in title had no effect on the substantive jobs performed.
[16] Commonly shortened to “Business Manager”.
In April 2004, Mr Bampton took on the additional responsibilities of the Business Managers for Western Eyre Peninsula and Eastern Eyre Peninsula as well as Business Manager for Port Lincoln. His job title was renamed “Business Manager – Eyre Peninsula”. His position was unique within Viterra in that he was the only Business Manager to have responsibility for both a country district (Eyre Peninsula) and port terminals (Port Lincoln and Thevenard). He continued to report to the Operations Manager in Adelaide and continued at the same level in the hierarchy equal to other Business Managers responsible for a country district or port terminal but not both.
From April 2004, Mr Bampton had three Operations Coordinators reporting to him. He also had a Training Coordinator and Maintenance Coordinator reporting to him.
On 15 June 2004, Peter Weaver, the Operations Manager, wrote to Mr Bampton setting out the terms of Mr Bampton’s employment with effect from 5 April 2004 (the June 2004 letter). The letter attached a Job and Person Profile. While the Profile attached to the letter was not tendered at trial, it is common ground that it was in materially the same terms as a later Profile dated August 2007 that was tendered (the Job and Person Profile). The June 2004 letter included the following terms:
5. Conditions of Employment
You will be entitled to four weeks annual leave per annum, sick leave of 12 working days per annum and 13 weeks long service leave after the completion of 10 years continuous service. Payment of annual leave loading has been incorporated into your salary.
Due to the seasonal nature of the company’s operations, your annual leave cannot normally be taken during the period of harvest intake in the months of November, December or January.
This appointment is at Port Lincoln. However there may be a future need to transfer you to another location to broaden your experience and/or to suit the organisational needs. In that case, while we will be willing to consult with you, we reserve the right to require you to move.
You will be required to undertake any necessary training as part of your position, or as directed by management.
This offer, if accepted, will replace all previous terms and conditions of employment.
6. Duties
These are outlined in the Job and Person profile and were discussed with you. You will also be required to carry out such other duties as may be directed from time to time.
15. Policies and Procedures
You will be bound, as an employee of the Company, to abide by the policies and procedures of this organisation as amended from time to time.
Copies of all policies and procedures are available on the intranet.
Should you require copies of the policies mentioned in this offer, please contact the Human Resource Department.
20. Termination
20.1 This Agreement may be terminated by either party on giving one month’s notice in writing to the other party. Notwithstanding the aforementioned, this Agreement may be terminated by us summarily at any time if you:
20.1.1 Fail, omit or neglect to carry out your duties under this Agreement in a competent and satisfactory manner (in our opinion);
20.1.2 Fail to comply with all lawful and reasonable directions given to you by a person who is so authorised by the Company;
20.1.3 Are guilty of serious or wilful misconduct;
20.1.4 Fail, omit or neglect to comply with safety practices and procedures;
20.1.5 Are found to have supplied inaccurate information, whether orally or in writing, in respect to your application of employment;
20.1.6 Engage in any other conduct warranting summary dismissal.
20.2 The Company may choose to pay you an amount equal to one month’s notice TRP in lieu of notice;
20.3 At the Company’s discretion:
20.3.1 You may be required to work through all (or part only) of the notice period;
20.3.2 The Company may make payment in lieu of the whole notice period (or the unworked balance of the period of notice period).
21. Transmission of Business
In the event of a transmission of Business, you will not be entitled to any redundancy or severance payment if the Company offers suitable alternative employment. This clause will take precedent over any Company Redundancy Policy or Appendix.
The Job Profile component of the Job and Person Profile provided:
JOB PROFILE
Primary Focus
·Manage the Business Centre to meet or exceed the expected outcomes in the Key Result Areas.
·Identify and develop business opportunities so that we grow and maintain ABB’s position as the leading Australian agribusiness.
Expected Outcomes
Customers
·Pursue long-term beneficial relationship with customers, providers and other stakeholders;
·Pro-actively identify customers needs to develop profitable solutions for all stakeholders;
·Meet or better the agreed Company targets and key performance indicators (KPIs);
·Develop strategies for the area to meet the current and future needs of the business;
·Manage all Company policies, procedures and quality standards;
·Initiate and justify capital and maintenance improvements;
·Ensure that existing capital infrastructure and equipment is maintained at a safe and efficient operation level;
·Assist with major capital developments within the Business Centre;
·Grow the business to achieve profitability and Asset Utilisation targets;
·Identify and develop approved new business opportunities;
·Promote the company profile and image to stakeholders and the wider community.
In September 2004, upon the merger of AusBulk and ABB Grain, ABB Grain became Mr Bampton’s employer on the same terms and conditions. Mr Weaver became Operations Manager – Storage and Handling.
In July 2006, Viterra adopted a Redundancy Policy (the Redundancy Policy). It is common ground that this was a policy within the meaning of clause 15 of the June 2004 letter and that it formed a term of the employment contract between Mr Bampton and Viterra.[17]
[17] Viterra amended the Redundancy Policy on 27 July 2010, but the Judge determined the case on the basis of the July 2006 version and Viterra does not contend in its Notice of Alternative Contentions that the Judge should have had regard to the later amended version.
The Redundancy Policy provided for a termination payment to an employee whose employment was terminated due to redundancy as defined. The payment comprised, in the case of an employee over 45 with at least two years’ completed service (such as Mr Bampton), five weeks’ notice or payment in lieu and a redundancy payment equal to three weeks’ ordinary pay per completed year. The Policy included the following provisions:
Definition of Redundancy
An Employee’s position is redundant where the Company has made a definite decision that it no longer requires the job an Employee has been doing, be done by anyone (and this is not due to the ordinary and customary turnover of labour) and that decision leads to termination of the Employee’s employment.
Redundancy Payments
A Permanent Employee with more than twelve months continuous service will receive at the time of his or her redundancy, termination payments calculated in accordance with the following:
Notice Period and Payment
· Four (4) weeks ordinary pay in lieu of notice (if applicable).
· The amount of notice will be increased by one (1) week if the employee is over forty-five (45) years old and has completed two (2) continuous years of service.
· An Employee may be required to work through all (or part only) of the notice period or the Company may make payment in lieu of the whole notice period (or the unworked balance of the notice period).
Redundancy Payment
For the purpose of redundancy, the calculation is as follows:
· Employees that have completed one year of continuous service but less than two years will be entitled to four (4) weeks ordinary pay.
· Employees that have completed two (2) or more years of continuous service will be entitled to (3) weeks per each completed year.
The maximum payment is capped at 104 weeks in total, inclusive of notice and severance payments.
Ordinary Pay
All payments will be calculated at the Employee’s ordinary rate of pay.
The term “Ordinary pay” generally means the Employees PAYG Cash amount (immediately prior to redundancy) plus any salary sacrifice amounts but excluding the legislated minimum Superannuation Guarantee Amount (or Kiwisaver in New Zealand).
Outplacement
At Management discretion, Outplacement services may be offered.
Transmission of Business
In the event of a Transfer of Business, an Employee will not be entitled to any redundancy or severance payment, if the Employee receives an offer of alternative employment comprising of continuity of service and comparable salary and status.
In June 2007, Andrew Hannon succeeded Mr Weaver as Operations Manager – Storage and Handling. Mr Bampton thereafter reported to Mr Hannon. Michael Hill was then or later became Business Manager – Adelaide Ports and Assistant Operations Manager, also reporting to Mr Hannon.
Grain harvests in South Australia, including Eyre Peninsula, were substantially down in 2006/2007, 2007/2008 and 2008/2009 as a result of a prolonged drought. In 2009 Viterra conducted a review of its permanent workforce resulting in reductions of 13 percent on Eyre Peninsula.
In September 2009, Viterra Canada acquired ABB Grain. Don Drombolis, a Canadian, became General Manager Operations, to whom Mr Hannon reported.
In 2009/2010, the grain harvest returned to “normal”.
In April 2010, Mr Hannon and Mr Hill visited Mr Bampton in Port Lincoln for a regular scheduled meeting. They expressed concern to Mr Bampton about four quality issues that had arisen in relation to grain.
On 29 April 2010, Mr Hannon and Mr Hill returned at short notice to visit Mr Bampton in Port Lincoln. The meeting was arranged because the master of a vessel at Port Lincoln refused to accept a load of wheat into which 25 tonnes of canola had been erroneously mixed.
At the two April meetings, Mr Hannon and Mr Hill told Mr Bampton that the focus of quality problems within the company was on Eyre Peninsula and that focus needed to be removed.
On 17 May 2010, Mr Bampton sent a memorandum to Mr Hannon, Mr Hill and Mr Drombolis. He referred to the improvement in the 2009/2010 harvest, changes in personnel to date in 2010 and prospective future requirements. He concluded the memorandum with the following passage:
EP structure
The overall structure of EP needs to be reviewed, starting at the top and brought in line and be consistent with the Company model. At the Business Manager level, the Manager should be responsible for either Ports or Country Facilities, not both.
This last suggestion was made of Mr Bampton’s own initiative and was not the result of any directive or suggestion by Mr Hannon.
On 19 May 2010, Mr Bampton telephoned Mr Hannon. He said that he was concerned about his future with the company. He was reassured by Mr Hannon, who told him that there was an ongoing role for him in the company.
As at May 2010, Mr Bampton had five Coordinators reporting to him. They were the Operations Coordinator EEP (Mark Cross based at Tumby Bay), Operations Coordinator WEP (Glenn Dunn based at Thevenard), Operations Coordinator Lincoln Terminal (Richard Murphy based at Port Lincoln), Maintenance Coordinator (Rodney Stringer) and Training Coordinator (Al Turner).
On 20 May 2010, Mr Bampton sent an email to Mr Hannon copied to Mr Drombolis and Mr Hill. He attached a memorandum recommending a restructure for Eyre Peninsula attaching two organisation charts. He recommended the creation of an Operations Coordinator position dedicated to the Thevenard terminal, leaving the Operations Coordinator WEP dedicated to country operations. He recommended that the base for EEP country operations, including the location of Mr Cross, be moved from Kimba to Cummins.
One organisation chart attached to the memorandum was headed by a Business Manager, to whom the Lincoln and Thevenard Terminal Coordinators together with the Maintenance and Training Coordinators, would report. The other organisation chart was headed by a Business Manager to whom the WEP and EEP Operations Coordinators would report. The memorandum was expressed to be further to Mr Bampton’s 17 May 2010 memorandum.
In May 2010, following and as a result of the quality problems discussed in the April meetings between Mr Hannon, Mr Hill and Mr Bampton, Mr Drombolis raised with Mr Hannon the possibility of splitting his role of Operations Manager – Storage and Handling into two separate positions, namely Manager Country Operations and Manager Terminal Operations, with Mr Hannon retaining the former role and Mr Hill assuming the latter role.
On or after Monday 24 May 2010, Mr Hill visited Mr Bampton at Eyre Peninsula. Mr Hill informed Mr Bampton that the company was considering a restructure involving the separation of terminals from country. Mr Hill said that if it proceeded, it was likely that Mr Bampton would be offered either a country role or a terminal role. Mr Bampton expressed concern about moving into a diminished role.
On Friday 28 May 2010, Mr Bampton sent an email to Mr Hannon, Mr Hill and Mr Drombolis. He said:
...
I understand, especially following Michael’s visit during the week, that the intention is to split EP into Country and Terminal.
I am very keen to remain on board and very excited about moving forward with changes in the organisation. However, I am not prepared to take a backward step or move into a diminished role.
Please advise my options?
On Monday 31 May 2010, Mr Hannon sent a responding email to Mr Bampton, Mr Hill and Mr Drombolis. He said:
...
You are correct in saying that we are reviewing possible options across the Eyre Peninsula organisational structure, however at this point in time no change to the existing structure has been determined. It is, therefore, not possible to outline any options for any employee before they exist.
We will continue to work on business improvement and as has been the case recently, will notify you of any potential change.
On 2 July 2010, Mr Drombolis wrote to each of Mr Hannon and Mr Hill confirming their appointments to the positions of Manager Country Operations and Manager Terminal Operations respectively with effect on 10 July 2010.
On 15 July 2010, Mr Hannon sent an email to Mr Drombolis attaching a memorandum concerning a proposed restructure of Eyre Peninsula. Mr Hannon said that, as a result of the restructure in head office, the structure of storage and handling on Eyre Peninsula was to be realigned. It was proposed that a new Business Centre office be established at Cummins. It was proposed that Mr Bampton be transferred to the role of Business Centre Manager – Eyre Peninsula located at Cummins. Mr Cross as Operations Coordinator would also be transferred to the Cummins Business Centre, together with his staff. Mr Hannon said that he intended to travel to Port Lincoln next week to discuss the proposed restructure with Mr Bampton. Once he had a response from Mr Bampton, he intended to notify other staff in the weeks to follow.
On Thursday 22 July 2010, Mr Hannon met with Mr Bampton on Eyre Peninsula. He told Mr Bampton that a decision had been made to split the company’s business into country operations and terminal operations at Mr Hannon’s level. He said that he (Mr Hannon) had accepted the position of Manager Country Operations and Mr Hill accepted the position of Manager Terminal Operations. Mr Hannon said that in future there would be a Business Manager for Eyre Peninsula country and a Business Manager for Eyre Peninsula terminals, meaning a split in Mr Bampton’s position. He said that in future the Business Manager for Eyre Peninsula would be located at a new Business Centre to be established at Cummins. He said “We will be offering you the role of Business Manager for Eyre Peninsula country”. He said that there would be no drop in remuneration or change to the reporting structure in that Mr Bampton would continue to report to him. Mr Bampton asked about the Port Lincoln terminal role. Mr Hannon said that he saw Mr Bampton’s skill set aligning most closely with country operations. He said that there would be discussion and evolution through a change process. There was no discussion of the timing of the implementation of the plan.
Mr Hannon told Mr Bampton that the positions of Business Manager Country and Business Manager Terminals would involve responsibilities that were less extensive but more intensive than the existing responsibilities of the Business Manager Eyre Peninsula.
Mr Hannon asked Mr Bampton how he felt about the proposed changes. Mr Bampton responded “Not very good”. Mr Bampton said that he needed a few days to think about it. Mr Hannon said that he would provide to Mr Bampton a proposed job description and he would like a response early the following week. Mr Hannon invited Mr Bampton to telephone him if he had any queries, including over the weekend.
At that time, a meeting had been arranged for the following Monday at the Chifley Hotel in Adelaide to discuss the logistics of transporting grain on Eyre Peninsula. A meeting of all Business Managers in the State had been arranged for the Tuesday and Wednesday to discuss the annual budget. Mr Bampton was to attend both meetings as Business Manager Eyre Peninsula. It was agreed that Mr Hannon and Mr Bampton would meet on the Monday at the Chifley Hotel to discuss the content of the proposed job description.
On Friday 23 July 2010, Mr Hannon sent an email to Mr Bampton which said:
As discussed yesterday I have attached a Job Description for the role of Business Centre Manager – EP. I would like to be in a position to confirm the change and establish a timeframe by Tuesday next week.
Call me any time to discuss.
The attached job description (the proposed job description) described the position as Business Centre Manager – Country Operations – Eyre Peninsula, responsible to the Manager – Country Operations. Under “Numerical Dimensions”, it said that the Business Manager was responsible for 120 staff (72 full-time and part-time permanent staff and 50 casual staff), 36 receival sites and a $16 million revenue budget.
On Sunday 25 July 2010 at 10.37 pm, Mr Bampton sent an email to Mr Hannon which said:
Andrew,
It is clear from our discussion and also the Job Description you have forwarded that the Company has decided to abolish the position of Business Manager – Eyre Peninsula.
The new position offered Business Centre Manager – Country operations –Eyre Peninsula is a significant downgrade.
There are considerably less responsibilities and accountabilities to at least the following:
·Staff Numbers
·Grain Storage Capacity
·Revenue
·Labour Budget
·Capital Projects
·Assets
·Grain Activity Tonnes and SOH
·Number of Operational Sites
·Key Communications
The new role is substantially different.
Given the above, it is clear that the Company has made my position redundant.
I now make claim to the Company redundancy benefit.
Ian Bampton
Business Manager
On Monday 26 July 2010, Mr Bampton flew to Adelaide to attend the logistics meeting and to meet Mr Hannon separately to discuss the proposed job description and whether Mr Bampton was going to accept the role offered to him. Mr Bampton attended the logistics meeting at the Chifley Hotel at 10.00 am.
At lunchtime, Mr Bampton met with Mr Hannon and Ben Norman, Viterra’s Human Resources Manager. Mr Norman gave to Mr Bampton a copy of the Redundancy Policy and section 386 of the Fair Work Act 2009 (Cth) defining the term “dismissed”. Mr Norman said that Mr Bampton was not entitled to a redundancy payment. Mr Norman said that the position offered to Mr Bampton was almost the same, the reporting structure being to Mr Hannon was the same, the remuneration was the same and the overall level of responsibilities was very similar. Mr Norman said that Mr Bampton had not been dismissed and the company had not terminated his employment. Mr Norman said that there was no redundancy within the meaning of the Redundancy Policy.
Mr Norman asked Mr Bampton whether he would feel differently if he was being offered the terminal role as opposed to the country role. Mr Bampton asked “Is that option on the table?” Mr Norman replied “No, it isn't.” Mr Bampton responded “Well, in that case it is just hypothetical, so let us move on”.
Mr Bampton said that the reductions in the number of staff, budget, assets and products under his control involved a significant loss. Mr Norman responded that his and Mr Hannon’s view remained the same in that Mr Bampton’s level of responsibilities and accountabilities would not be reduced significantly and the company had not terminated his employment and therefore he was not entitled to redundancy.
Mr Bampton asked what his options were. Mr Norman said “You have got the option to either accept the role or resign”. Mr Bampton said “Look I am not comfortable with making that decision here and now in this forum. I would like representation going forward”. Mr Norman agreed and said “I will make myself available all afternoon. If you give me a call and let me know what you have arranged, I will make myself available to meet you”.
Mr Bampton telephoned his brother-in-law, Peter Moloney, a solicitor. He met with Mr Moloney. At 3.00 pm they both met with Mr Hannon and Mr Norman. Mr Moloney said that he was instructed that Mr Bampton had been informed that his position was being terminated and that his choices were either to accept the new position in charge of country operations on Eyre Peninsula or resign. Mr Moloney said that this gave rise to an entitlement to a redundancy payment. Mr Norman said that the company’s position was that there was no substantial change to Mr Bampton’s duties and they were not demoting him. It was substantially the same job with the same reporting line, remuneration, accountability and responsibility. Mr Norman said that the company had not terminated Mr Bampton’s employment and had no intention of doing so. In response, Mr Bampton repeated what he had said at the lunchtime meeting at the Chifley Hotel concerning reductions in his responsibilities. The parties then had a without prejudice discussion.
Mr Bampton sent an email to Mr Norman at 4.22 pm that afternoon. He said:
Ben,
I refer to my discussions with you and Andrew before lunch today. I note that the Company has declined the claim for a redundancy benefit as made per my 27/7/10 email transmitted 10.37 pm. That is, upon the bases that the new position, which you have offered to me as Business Centre Manager Country EP, is substantially the same as my current position and that the Company does not intend to terminate my employment.
I do not accept your assertion that the new position is substantially the same as my old position.
You have informed me that I have two choices which are to accept the new position or to resign my employment.
I decline to accept either of your choices. I would have been prepared to continue in my current position but you have confirmed that the Company has already decided to abolished [sic] it. That amounts to a repudiation of my contract of employment with the Company, which I accept.
Given the above, I renew my claim to the redundancy benefit.
Ian Bampton
Mr Hannon telephoned Mr Bampton at 7.42 pm that evening. Mr Bampton asked whether he was expected to come to the budget meeting the next day. Mr Hannon told Mr Bampton that he was to attend work the next day in the role of Business Manager Eyre Peninsula and was to continue doing so while Mr Hannon considered the structure.
Mr Bampton sent an email to Mr Hannon at 10.08 pm that night. He said:
Andrew,
I refer to your telephone call to me earlier this evening.
I note your invitation to return to work tomorrow as if nothing has happened.
It is too late for that.
I refer you to my email to Ben transmitted at 4.22 pm as per a copy which is attached.
Ian Bampton
On 28 July 2010, there was an exchange by email of letters between solicitors for Viterra and Mr Bampton. Viterra’s solicitors said that Viterra had not yet introduced any change to Mr Bampton’s role, it still had a position for him in his current role of Business Manager Eyre Peninsula, a process of discussion had been under way and Mr Bampton had pre-empted an outcome of that discussion. They enquired whether Mr Bampton was going to attend work, whether he considered he was still employed and if not when his employment ceased. Mr Bampton’s solicitors responded saying that Mr Bampton’s position remained as stated in his 26 July email to Mr Norman, namely that Viterra had repudiated his contract of employment and he had accepted that repudiation. They confirmed a request for payment of accrued employment entitlements and a redundancy payment.
On 2 August 2010, Viterra’s solicitors wrote to Mr Bampton’s solicitors saying that Viterra would pay Mr Bampton’s accrued employment entitlements up to and including 26 July 2010 but he was not entitled to any redundancy payment. On the same day, Mr Hannon sent an email to Viterra staff informing them that Mr Bampton had completed his employment with Viterra after 33 years of service.
The trial
The only witnesses to give evidence were Mr Bampton and Mr Hannon. A book of chronological documents was tendered.
Mr Bampton’s principal cause of action was for a contractual debt being a redundancy payment due to him of $243,461.92 pursuant to the terms of the employment contract.[18]
[18] He pleaded alternative claims founded on estoppel, misleading conduct and breach of the Fair Work Act 2009 (Cth) but the Judge dismissed those claims, there is no appeal against their dismissal and they need not be further considered.
Mr Bampton’s case was that Mr Hannon’s statements to him on 22 July and sending the proposed job description to him on 23 July 2010 comprised a renunciation of the employment contract, which renunciation he accepted and contract he terminated by his email of 25 July 2010 to Mr Hannon. In the alternative, Mr Norman’s statements to him on 26 July 2010 comprised a renunciation of the contract, which renunciation he accepted and contract he terminated by his email of 26 July 2010 to Mr Norman.
Mr Bampton’s case was that, by the conduct referred to in the previous paragraph, Viterra “made a definite decision that it no longer required the job to be done by anyone” within the meaning of the Redundancy Policy.
Mr Bampton’s case was that Viterra’s “decision [led] to termination of the employee’s employment” within the meaning of the Redundancy Policy when Mr Bampton terminated the employment by his email of 25 July 2010 or alternatively 26 July 2010.
Viterra denied that it renounced its obligations under the employment contract and contended that by his email of 26 July 2010 Mr Bampton resigned his employment.
Viterra denied that it made a definite decision that it no longer required the job Mr Bampton was doing to be done by anyone.
Viterra contended that a resignation does not comprise “termination of the employee’s employment” arising out of a decision by the employer that it no longer requires an employee’s job to be done by anyone within the meaning of the Redundancy Policy.
The reasons for judgment
The Judge summarised the evidence of Mr Bampton and Mr Hannon and made findings where there was a substantial conflict between them. In those cases, the Judge preferred Mr Hannon’s evidence.
The Judge rejected Mr Bampton’s evidence that he was told by Mr Hannon before 17 May 2010 of a proposal to split his position into country and ports and that the suggestion to that effect in his 17 May 2010 memorandum was included at the direction of Mr Hannon and over his protest. In this respect, the Judge accepted Mr Hannon’s evidence that he did not mention any proposed split of position to Mr Bampton before 17 May 2010 and that the suggestion in Mr Bampton’s memorandum was entirely of Mr Bampton’s own initiative.
The Judge rejected Mr Bampton’s evidence that he was told by Mr Hannon on 22 July 2010, and by Mr Norman and Mr Hannon on 26 July 2010, that his position had been abolished. The Judge accepted Mr Hannon’s evidence that this had not yet occurred, albeit that it had been decided that it would occur at some time in the future, and that Mr Bampton was only told that it would occur in the future.
The Judge rejected Mr Bampton’s evidence that he was told that the job description to be sent to him would be a final document. The Judge accepted Mr Hannon’s evidence that its contents were open for discussion, which discussion was scheduled to take place at the Chifley Hotel on 26 July 2010.
The Judge found that as at 25 and 26 July 2010 Viterra had made a definite decision that it would split the Business Manager Eyre Peninsula position. The change was going to happen in the near future but it had not yet happened. Mr Bampton’s existing position had not been abolished. Viterra’s decision would not be implemented until all of the negotiations that needed to be had with incumbents had been completed. Those were matters under the control of Mr Hannon.
The Judge found that Mr Bampton’s duties and responsibilities as Business Manager Eyre Peninsula were divided evenly between country and terminals. The Judge made this assessment on a holistic evaluative basis:
He was to carry out only a portion, about a half, of his former duties but in a more focused and concentrated way and he was to be paid at the same level of remuneration. He had less responsibilities that were more focussed in the one area of operation. It is self evident that to cleave a position of that seniority means that there would be less responsibility and that is a matter for the decision of the employer. I am satisfied that the proposed position was identifiable as about 50 per cent of the prior position. There is no arithmetic exactitude here. This is a matter for judgment. In forming that judgment I have taken into account the differences in the two proposed positions. These include that there may be more persons reporting to the terminal manager. I have assessed these differences and the importance of them in reaching my conclusion. Consistent with authority I discuss below, it is necessary for this Court to make an overall assessment on a global basis.[19]
[19] [2014] SADC 170 at [189].
There is no contest by either party on appeal with the findings of fact by the Judge, including the Judge’s assessment of the division of the duties of Mr Hannon’s position between country and terminals representing a 50/50 split. The summary of the facts set out in the previous section accords with the Judge’s findings of fact.
The Judge concluded that Viterra’s conduct before 25 July 2010 was repudiatory so as to justify termination of the employment contract by Mr Bampton and that he did so by his email sent on 25 July 2010. The Judge’s reasoning is encapsulated in the following extracts from his Honour’s reasons for judgment:
Turning first to the question of repudiatory conduct prior to 25 July 2010. As at that date there had been a proposal put to the plaintiff in relation to the splitting of his position. That proposal had not yet been carried into effect but it was part of the overall plan of the defendant. No doubt it was imminent. The situation was that this change was a fait accompli from the point of view of the defendant. The plaintiff was being told of the plans of the defendant and in circumstances where the defendant was requesting the plaintiff to give consideration to those plans. This was because the defendant wanted to maintain the plaintiff in its employ. … The reorganisation of the Business Manager’s role on Eyre Peninsula was such that it would amount to sufficient change to justify a conclusion of a repudiation of the contract....
In my opinion and in the application of principle, the conversation between the plaintiff and Mr Hannon on 22 July 2010 did and would have conveyed to the objective reasonable person, the renunciation by the defendant of the contract. …
In my opinion the contract of employment was properly terminated by the plaintiff in the evening of 25 July 2010. The plaintiff was justified in treating the conduct of the defendant as repudiatory for the reasons that I have set out above.[20]
[20] At [180], [187] and [203].
The Judge considered that the definition of redundancy in the Redundancy Policy involved two elements:
1.a definite decision by Viterra that it no longer requires the job an employee has been doing be done by anyone; and
2.that decision leads to termination of the employee’s employment.
The Judge considered first whether the second element was satisfied. The Judge concluded that it was:
In respect of the second aspect of the definition of redundancy concerned with whether the decision leads to termination of employment (of the plaintiff) I am of the view that, on a finding of redundancy (if that be the case), the question is to be answered in favour of the plaintiff. This is because, consistent with O’Meara v Stanley Works Pty Ltd, the end of the plaintiff’s employment with the defendant is the probable result of the defendant’s conduct. This follows an objective analysis of the conduct of the employer: the pertinent question is whether the plaintiff in his position had any real choice but to resign. The answer to that question is in the affirmative because of the effect of the decision to cleave the role of the defendant. This meant that the plaintiff would operate under different circumstances, and consequently he lost from his role half of the responsibilities that he formerly fulfilled in terminals were now to move to a new manager, who was to be appointed by Mr Hill.[21]
[21] [2014] SADC 170 at [205]. (Citation omitted)
In Quality Bakers of Australia Ltd v Goulding,[67] Beazley J reached a similar conclusion in relation to two bread carters who were dismissed when their employer eliminated its smaller customers and rationalised its bread deliveries. Beazley J said:
A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed; or where the employer wishes to amalgamate jobs: R v The Industrial Commission of South Australia; ex parte Adelaide Milk Co-Operative Ltd per Bray CJ; Gromark Packaging v FMWU per Franklyn J. It is not necessary for the work to have disappeared altogether. As was said in Bunnet’s case:
“Organisational restructuring may result in a position being abolished and the functions of some of them being given to another or split amongst others.”
[67] (1995) 60 IR 327.
In Dibb v Commissioner of Taxation,[68] Mr Dibb was employed by AVCO as a District Manager. AVCO acquired other businesses which resulted in its having staff in excess of its requirements and decided to rationalise its workforce in consequence of those acquisitions. AVCO re-distributed the duties previously performed by its District Managers and added further duties. Mr Dibb was then surplus to AVCO’s requirements and it had no other position available for him. It terminated his employment and paid him compensation including $53,810 that Mr Dibb contended was a bona fide redundancy payment. Sections 27A and 27F of the Income Tax Assessment Act 1936 (Cth) gave concessionary tax treatment to an eligible termination payment in consequence of the dismissal of a taxpayer from employment by reason of the bona fide redundancy of the taxpayer. Redundancy was not defined but the Commissioner of Taxation issued Taxation Ruling 94/12 that defined redundancy in similar terms to that contained in the Redundancy Policy. The Commissioner’s definition was in the following terms:
Redundancy can be described as the situation where an employer no longer requires employees to carry out work of a particular kind or to carry out work of a particular kind at the same location. Redundancy refers to a job becoming redundant and not an employee becoming redundant. An employee’s job is considered to be redundant if:
·an employer has made a definite decision that the employer no longer wishes the job the employee has been doing to be done by any one;
·that decision is not due to the ordinary and customary turnover of labour;
·that decision led to the termination of the employee’s employment; and
·that termination of employment is not on account of any personal act or default of the employee.
[68] [2004] FCAFC 126, (2004) 136 FCR 388.
A Full Court of the Federal Court held that Mr Dibb had been made redundant within the meaning of sections 27A and 27F. Spender, Dowsett and Alsop JJ referred to R v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-Operative Ltd, Short v FW Hercus Pty Limited, Jones v Department of Energy and Minerals, Quality Bakers of Australia Ltd v Golding and the definitions of “redundant” in the Macquarie and Oxford English Dictionaries and said:
In Jones Ryan J observed that 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.’ We accept that view. Ryan J then observed that where such duties are re-assigned, the question is whether any function or duty remains to be performed by the employee. We do not understand his Honour to have meant that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant. …
… We consider that it is more accurate to say that an employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by any employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant. Re-allocation of duties within an organization will often lead the employer to consider whether an employee, previously employed to perform specific functions assigned to a particular “job”, will be able to perform any available “job” existing after such re-allocation. Even if the employee’s job, defined by reference to its duties, has disappeared, he or she may be able to perform some other available job to the satisfaction of the employer. In that case, no question of redundancy arises. It is only if the employer considers that there is no available job for which the employee is suited, and that he or she must therefore be dismissed, that the question of redundancy arises. If, in good faith, the employer:
·has re-allocated duties;
·considers that the employee is not suitable to perform any available job, defined by reference to those re-allocated duties, existing after the re-allocation; and
·for that reason, dismisses the employee,
then, for the purposes of s 27F, the employee is dismissed by reason of his or her bona fide redundancy. In the above discussion we have used the word “available” as meaning “vacant”, and the word “suitable” as meaning “within the employee’s capacity”.
In the present case, the employer re-distributed the duties previously performed by its District Managers and at the same time, added further duties. The job, described by reference to its duties as previously performed by Mr Dibb, ceased to exist. The employer no longer wished to have that job performed by anybody. The work was to be differently distributed. The result was that there was no job for which his skills qualified him. He was ‘surplus to [AVCO’s] personnel needs’.[69]
[69] At [41] and [43]-[44]. (Emphasis in original)
In Whittaker v Unisys Australia Pty Ltd,[70] it was a term of the employment contract that, if Unisys wished to terminate the agreement as a result of the position becoming redundant, it would give six months’ notice of termination or payment in lieu of notice. Redundancy was not defined. Mr Whittaker was employed as General Manager, Asia Pacific. Unisys decided to divide Mr Whittaker’s duties between two persons: Mr Whittaker and Ms Carter. Mr Whittaker was not dismissed. Ross J held that there was no redundancy notwithstanding that Ms Carter was given the title General Manager, Asia Pacific. Ross J said:
[A] redundancy may arise where the duties performed by an employee are redistributed among other employees. The employer still requires the duties to be performed, but the re‑organisation gives rise to a redundancy. The plaintiff says that that is what happened here…
I accept that the duties that made up Mr Whittaker’s former GM and VP role were redistributed between Ms Carter and Mr Whittaker. But I do not accept that Mr Whittaker was made redundant as a result. ..
Unysis rearranged its operational structure by splitting the functions of Mr Whittaker’s former GM and VP role between Mr Whittaker and Ms Carter. But, importantly, after the reorganisation Mr Whittaker still had duties to perform.[71]
[70] [2010] VSC 9, (2010) 26 VR 668.
[71] At [96], [97] and [99].
In Hodgson v Amcor Ltd,[72] Mr Hodgson was employed by Amcor as Group General Manager Fibre reporting to the Managing Director Mr Sutton. Amcor’s redundancy policy provided that a retrenchment package would be available to an Eligible Staff Member “whose position is redundant and who is retrenched”. Redundancy was not defined. There were six Group General Managers in charge of six Divisions: Glass, Plastics, Paper, Metals, Fibre and Cartons/Sacks. They all reported to Mr Sutton. There were clashes between Mr Hodgson and Mr Sutton resulting in Mr Sutton becoming dissatisfied with Mr Hodgson. Amcor decided to restructure its Divisions by breaking up the Cartons/Sacks Division and redistributing cartons to Fibre, sacks to Metals and the Petrie Mill to Paper. Amcor did not make the Group General Manager Cartons/Sacks (Mr Armstrong) redundant. Instead, it terminated Mr Hodgson, moved the Group General Manager Metals (Mr Roberts) to Fibre (replacing Mr Hodgson) and moved the Group General Manager Cartons/Sacks to Metals (replacing Mr Roberts). Vickery J held that Mr Hodgson had not been made redundant. He said:
[72] [2012] VSC 94, (2012) 264 FLR 1.
In essence, subject to any qualification or re-statement found in the relevant contract of employment or any applicable statute, the common law concept of “redundancy” comes down to the following propositions:
(a) A job becomes redundant when the job of the employee ceases to exist because the employer, for whatever reason, whether by reason of reorganisation, mechanization, change in demand or other reason, no longer desires to have it performed by anyone;[73]
(b) This can occur either when the role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists;[74]
(c) However, redundancy is not limited to the circumstance where the employer, no longer desires to have the work previously performed by the terminated employee done by anyone;
(d) A redundancy may also arise upon the redistribution of job functions, where the duties performed by an employee are redistributed among other employees.[75] In this case the employer still requires the duties to be performed, but the re‑organisation may give rise to a redundancy. In this event, although the duties remain to be performed, ‘for all practical purposes the original role no longer exists’ because the duties are divided and assigned amongst others. In such a case the question is whether any function or duty remains to be performed by the employee. A redundancy will occur if, after the reorganisation, the employee in question is left with no duties to discharge;[76] and
(e) Redundancy will not arise where the termination of employment is carried out solely because of any personal act or default of the employee terminated or for any consideration peculiar to that employee.[77]
…
Th[e] evidence points to the role of GGM Fibre Packaging being modified, but not in such a way as to alter the fundamental nature of the position.
Nor was there any redistribution of job functions in relation to the GGM Fibre Packaging position with the result that Hodgson was left with no duties to perform as a consequence. True it is that after 1 October 2004 Hodgson was “surplus to requirements” in the sense that he had no role or duties to perform for Amcor after that time. However, this was not brought about by any redistribution of Hodgson’s job functions by splitting and assigning the relevant duties to others.
In my opinion, the reorganisation within Amcor did not result in Hodgson’s employment being capable of being terminated by reason of redundancy.
Further, I am satisfied that Amcor did not terminate Hodgson’s employment on the ground of imminent redundancy. Rather, it elected to terminate Hodgson’s employment on the basis of differences in management style and clashes between Hodgson on the one hand and his superior, Sutton on the other. It determined to appoint Roberts in his place.[78]
[73] R v the Industrial Commission of South Australia: ex parte Adelaide Milk Supply Cooperative Limited & Anor (1977) 16 SASR 6 at 8; Fosters Group Limited v David Kou Tien Wing 148 IR 224 [2005] VSCA 322, Habersberger J at [36].
[74] Ibid, Wing at [36].
[75]Whittaker ibid at [95-96]; Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332-333; Fosters Group Ltd v Wing 148 IR 224 [2005] VSCA 322 at [35].
[76] Ibid per Ryan J at 308.
[77] Supra.
[78] At [371], [383]-[386]. (Footnotes retained)
In UGL Rail Services Pty Ltd v Janik,[79] Mr Janik was employed by UGL as General Manager, Strategic Projects. It was a term of his employment contract that, should he be made redundant whilst employed in that position, he would be entitled to redundancy payments. Redundancy was not defined. His employment was terminated and someone else appointed to the position of General Manager, Passenger Sales to perform much the same functions as had been performed by him. The New South Wales Court of Appeal held that Mr Janik had not been made redundant. Sackville AJA (with whom Emmett JA and Adamson J agreed) quoted the first paragraph of the passage from the judgment of Vickery J extracted at [201] above and said:
The opening words of this extract must be kept in mind: the starting point for analysis must be the language of the relevant statute, award or contract of employment. Subject to this qualification, Vickery J's analysis in my view accurately summarises the principles stated in the cases. The key concept is that the job performed by the claimant ceases to exist, or the duties have so changed that for all practical purposes the role no longer exists.
This concept cannot be applied in the manner of a mathematical formula. A difficult judgment may have to be exercised, for example where the nominal position remains in place but the duties of that position are substantially altered. Similarly, if the name of the position has been changed, but many of the duties and responsibilities attached to the previous position are retained, there may be no redundancy. But the fact that the duties attached to a position have changed or some responsibilities have been transferred to other positions does not establish that the position, or the occupant of the position, has been made redundant. Ordinarily, it is necessary for the employee claiming to have been made redundant to show that the changes in the duties and responsibilities of a position are so substantial that for practical purposes the position no longer exists. That may come about in a particular case where a position appears to continue (whether under the name or a different name), but the duties and responsibilities of the position are so substantially altered that it is largely stripped of its functions.[80]
[79] [2014] NSWCA 436.
[80] At [131]-[132]. (Citations omitted)
The parties also cited Hawkins and another v Commonwealth Bank of Australia,[81] Foster’s Group Limited v Wing[82] and Gamboni v Bendigo and Adelaide Bank Ltd.[83] In each case, the agreement contained a specific definition of redundancy quite different to the definition in the Redundancy Policy. Those authorities are of no assistance in the present case.
[81] (1996) 70 IR 213. See also Commonwealth Bank of Australia v Finance Sector Union of Australia [2002] FCAFC 193, (2002) 125 FCR 9.
[82] [2005] VSCA 322, (2005) 148 IR 224.
[83] [2013] VSCA 92.
The parties also cited Campbell v Encyclopaedia Britannica Australia Ltd[84] at first instance and Encyclopaedia Britannica Australia Ltd v Campbell[85] on appeal. That case is of no assistance because Mr Campbell’s employment was terminated due to the company’s dissatisfaction with his performance and this rendered it unnecessary for the Court of Appeal to consider whether otherwise his position might have been considered redundant.[86]
[84] [2008] NSWSC 1178.
[85] [2009] NSWCA 286.
[86] [2009] NSWCA 286 at [72] per Sackville AJA (with whom Giles and McFarlan JJA agreed). See UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436 at [122] per Sackville AJA (with whom Emmett JA and Adamson J agreed).
In each of Jones v Department of Energy and Minerals[87] to UGL Rail Services Pty Ltd v Janik[88] considered above, the employment or enterprise agreement or (in the case of Dibb v Commissioner of Taxation[89]) statute made specific provision for “redundancy” but did not define that term. A number of authorities refer to what is often called the “common law meaning” of redundancy in these circumstances. The name “common law meaning” is technically incorrect because the meaning is the result of the process of construction. However, it is a useful shorthand reference to that meaning that is commonly attributed to “redundant” when used in the context of an industrial agreement providing for a special lump sum payment on termination of employment as a result of redundancy. I refer to this meaning as the “common meaning” without implying that there is a single or universal meaning of the word “redundant” or that the meaning of the word in a particular case is not ultimately derived by the process of construction applied to the particular case.
[87] (1995) 60 IR 304.
[88] [2014] NSWCA 436.
[89] [2004] FCAFC 126.
The construction of a contractual or statutory provision involves consideration of the text, context, evident purpose and fairness of the provision.[90] Caution is required in having regard to the construction of the word “redundant” in other cases addressing other agreements in other circumstances because the text, context and evident purpose will never be identical. Nevertheless, there is utility in having regard to authorities addressing the meaning of the word redundant when there is sufficient similarity with the text, context and evident purpose.
[90] Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 105-106 per Barwick CJ and 109-110 per Gibbs J; Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28, 194 CLR 355 at [69]-[71] per McHugh, Gummow, Kirby and Hayne JJ; Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 76 ALJR 436 at [10] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ and [68]-[70] per Kirby J; Westfield Management Limited v AMP Capital Property Nominees Limited [2012] HCA 54 at [27] per French CJ, Crennan, Kieffel and Bell JJ.
Subject to one possible anomaly, there is a consistency and unity in the results of the cases from Jones v Department of Energy and Minerals[91] to UGL Rail Services Pty Ltd v Janik[92] considered above. These are also consistent with the one case in which the text of the redundancy provision was similar to the text of the Redundancy Policy, namely Short v FW Hercus Pty Limited.[93] Those results accord with the following propositions:
1.In none of the cases was the employee dismissed because the employee’s work was superseded by a machine or by the employer outsourcing the work. However, all of the cases proceed on the premise that there would be a redundancy in this circumstance.
2.In several cases, the employee was dismissed simply because the employer reduced the number of positions performing the type of work performed by the employee, there was not enough work to retain all employees holding those positions, the position of the employee in question was abolished and the employee’s work was redistributed between the continuing employees in the positions at that level. In these cases, the employer rationalised the number of positions due to economic circumstances[94] or reorganisation.[95] In each case, it was held that the dismissed employee was redundant.
3.In one case, the employee was dismissed but there was no reduction in the number of employees holding positions at that level and another person was appointed to a position at his level performing some of his functions under a differently titled position. It was held that there was no redundancy because the employee’s position had not been so substantially altered that it was largely stripped of its functions.[96]
4.In one case, the employer divided the duties of the employee's position between two persons, one of whom was the employee who was not dismissed. It was held that there was no redundancy because the employee still had duties to perform.[97]
5.In no case was it held that there would be a redundancy if an employee was not dismissed but retained his or her position at the same level and the same remuneration and with less extensive but more intensive duties.
[91] (1995) 60 IR 304.
[92] [2014] NSWCA 436.
[93] (1993) 40 FCR 511.
[94] Short v FW Hercus Pty Limited (1993) 40 FCR 511; Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327. The
[95] Jones v Department of Energy and Minerals (1995) 60 IR 304; Dibb v Commissioner of Taxation (2004) 136 FCR 388.
[96] UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436.
[97] Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668.
The possible anomaly is the decision in Hodgson v Amcor Ltd.[98] In that case, the company restructured resulting in a reduction of positions at the Group General Manager level from six to five, necessitating the dismissal of one Group General Manager. The company chose Mr Hodgson as the one to dismiss. At first sight, it might be thought that the situation fell into the category identified at item 2 above. The result may be explicable on the basis that the position that Mr Hodgson occupied (Group General Manager Fibre) continued, albeit occupied by Mr Roberts instead of Mr Hodgson, and the dismissal was the result of personal factors rather than the reduction in positions at the Group General Manager level. That case raised interesting questions of causation the resolution of which need not be considered here.
[98] [2012] VSC 94, (2012) 264 FLR 1.
The proper construction of the Redundancy Policy
Against the above background, I turn to the proper construction of the definition of redundancy in the Redundancy Policy:
An Employee’s position is redundant where the Company has made a definite decision that it no longer requires the job an Employee has been doing, be done by anyone and that decision leads to determination of the Employee’s employment.
It is common ground that, in determining whether the company’s decision is that it no longer requires the job an employee has been doing to be done by anyone, the job is to be identified as a matter of substance and not form. Hence, the mere fact that the job title stays the same or changes is not determinative, although of course a change or no change in the job title might or might not evidence a substantive change. Beyond this common ground, the constructions advanced by the parties diverge dramatically.
Mr Bampton contends that the reference to “job” in the second line of the definition is not to the tasks undertaken by the employee by rather is synonymous with the reference to “position” in the first line and encompasses the entirety of the employee’s existing position, including the tasks, status, seniority, reporting lines and level of autonomy. If there is a substantive change in the position involving a substantial reduction (or increase) in the scope of tasks undertaken or in the status, seniority, reporting lines or autonomy of the employee, the job within the meaning of the definition ceases to exist and no question of comparing the pre-restructure job with the post-restructure job arises. In the present case, Mr Bampton’s job was to cease to exist because the title was to change, 50 percent of the tasks were to be transferred to someone else, he was to have less personnel reporting to him and he was no longer to be responsible for terminal operations, albeit he was to have greater depth of responsibility for country operations. The Judge erred in embarking upon any comparison between the jobs before and after the restructure.
Conversely, Viterra contends that the reference to “job” in the second line of the definition is confined to the tasks undertaken by the employee and the word “job” is used in contradistinction to the word “position” in the first line. Provided that there are still some tasks performed by the employee before a restructure that are still to be performed, albeit by different employees, after the restructure, there is no redundancy. The concept of redundancy under the Redundancy Policy is confined to cases in which an employee is dismissed because the employee’s work is superseded by a machine, the employer outsources the work or otherwise.
Both of these extreme constructions should be rejected. On the one hand, the word “job” is not confined merely to the tasks performed by the employee, such that redundancy is confined to a situation in which none of those tasks are performed by any employee after the change. On the other hand, the word “job” is not synonymous with the employee’s “position” such that any substantive change to any material aspect of that position results in the job no longer being required to be performed by anyone.
While the Redundancy Policy contains its own definition of redundancy, that definition is to be construed in the context that the Policy chose to use the word “redundant” which had an established ordinary English meaning and an established common meaning in the context of industrial agreements providing for a lump payment on termination of employment as a result of redundancy. Those ordinary and common meanings inform the construction of the definition in the Redundancy Policy.
While it is not the case here, if the company dismissed an employee because it rationalised and reduced the number of positions performing the type of work performed by the employee that employee’s position was abolished and his or her work redistributed between the continuing employees in the other positions at that level, it may be expected that this would fall within the definition of redundancy in the Redundancy Policy and that the company’s decision was that “it no longer requires the job an Employee has been doing, be done by anyone” within the meaning of the Policy.
On the other hand, if the company wishes to retain an employee in his or her position but to make changes to his or her scope of work by reducing the breadth of the employee’s responsibilities and making a corresponding increase in depth, when there is no material change in the employee’s status, seniority, reporting to his or her superior or level of autonomy, it may be expected that this would not amount to a decision that the company “no longer requires the job an Employee has been doing, be done by anyone” within the meaning of the Policy.
The question whether the nature and degree of change in the job is such that the decision to make the change is to be assessed as “no longer require[ing] the job an Employee has been doing, be done by anyone” within the meaning of the Policy will involve an evaluative assessment of fact and degree. Contrary to the submissions of both parties, the Judge did not err in deciding that it was necessary to undertake such an evaluation.
While the approach articulated by the New South Wales Court of Appeal in UGL Rail Services Pty Ltd v Janik[99] was in the different context of considering the common meaning of redundancy when it was not defined in the industrial agreement, in a general sense that approach is apposite to the approach to be undertaken under the Redundancy Policy, namely:
The opening words of this extract must be kept in mind: the starting point for analysis must be the language of the relevant statute, award or contract of employment. Subject to this qualification, Vickery J's analysis in my view accurately summarises the principles stated in the cases. The key concept is that the job performed by the claimant ceases to exist, or the duties have so changed that for all practical purposes the role no longer exists.
This concept cannot be applied in the manner of a mathematical formula. A difficult judgment may have to be exercised, for example where the nominal position remains in place but the duties of that position are substantially altered. Similarly, if the name of the position has been changed, but many of the duties and responsibilities attached to the previous position are retained, there may be no redundancy. But the fact that the duties attached to a position have changed or some responsibilities have been transferred to other positions does not establish that the position, or the occupant of the position, has been made redundant. Ordinarily, it is necessary for the employee claiming to have been made redundant to show that the changes in the duties and responsibilities of a position are so substantial that for practical purposes the position no longer exists. That may come about in a particular case where a position appears to continue (whether under the name or a different name), but the duties and responsibilities of the position are so substantially altered that it is largely stripped of its functions.[100]
[99] [2014] NSWCA 436.
[100] At [131]-[132]. (Citations omitted)
I do not understand Mr Bampton to contend that there is necessarily an identity between a unilateral change by the employer to an employee’s position that extends beyond that authorised by the employment contract for the purpose of determining whether a unilateral change is in breach of contract and a change that entails the employer no longer requiring the job the employee has been doing be done by anyone for the purposes of the Redundancy Policy. In any event, the two matters arise in very different contexts and give rise to very different considerations and there is no necessary identity between them.
Whether a unilateral change to an employee’s position is in breach of contract will depend fundamentally upon the terms of the particular contract. One employee’s contract might give the employer very broad power to change the nature and scope of the duties of the employee’s position, remuneration, status and seniority; while another employee's contract might very narrowly constrain the employer not to make any significant changes at all to those matters. In the latter case, a unilateral reduction of one percent of the employee’s duties or $10 per week in allowances might be in breach of contract and yet there could be no suggestion that the employee was made redundant, ie that the employer no longer required the job the employee has been doing be done by anyone within the meaning of the Redundancy Policy.
The Redundancy Policy has general application to all employees of the company at all levels. It should be construed so that it operates in a consistent manner without necessarily being dependent upon the vagaries of the individual employee's employment contract and the scope given by it to the employer to make changes.
Was Mr Bampton’s position made redundant within the meaning of the Policy?
Under the restructure, Mr Bampton was to remain at Business Manager level reporting directly to Mr Hannon at Operations Manager level. His hours of work and remuneration were to remain the same. His status, seniority and level of autonomy were to remain the same. He would continue to supervise the same personnel in country operations that he had been supervising.
The substantive change was that Mr Bampton was to concentrate on half the breadth of operations for which he had previously been responsible but there was to be a corresponding increase in the depth of the operations for which he would remain responsible.
Mr Bampton’s job was not stripped of its functions. His job did not cease to exist. His duties and responsibilities were not so substantially altered that for practical purposes his role no longer existed. It could not be said that the company no longer required the job Mr Bampton had been doing to be done by anyone. On the contrary, the company required the job that Mr Bampton had been doing to continue to be done by Mr Bampton subject to the management of terminal operations being transferred to a new Business Manager.
Mr Bampton was not made redundant within the meaning of the Redundancy Policy and was not entitled to any redundancy payment in the event that he chose (as he was entitled to do) not to agree to a variation of the employment contract and he chose to resign or the company chose (as it was entitled to do) to terminate his employment on four weeks’ notice or payment in lieu thereof.
The Judge was correct in holding that in the circumstances Mr Bampton was not made redundant within the meaning of the Redundancy Policy.
Conclusion
I would dismiss the appeal.
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