Benjamin Lewis Greig v KDR Victoria Pty Ltd T/A Yarra Trams
[2022] FWC 8
•7 JANUARY 2022
| [2022] FWC 8 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Benjamin Lewis Greig
v
KDR Victoria Pty Ltd T/A Yarra Trams
(U2021/8805)
| DEPUTY PRESIDENT MASSON | MELBOURNE, 7 JANUARY 2022 |
Application for an unfair dismissal remedy – jurisdiction objections upheld – Applicant earnings above high income threshold - dismissal a case of genuine redundancy – application dismissed.
Introduction
On 4 October 2021, Mr Greig (the Applicant) made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging he had been unfairly dismissed from his employment with KDR Victoria Pty Ltd T/A Yarra Trams (the Respondent) on 23 September 2021.
On 26 October 2021, the Respondent filed its Form F3 response to the unfair dismissal application in which it raised two jurisdictional objections to the application, those being the Applicant’s earnings were in excess of the High Income Threshold (HIT) of $158,500 and that the Applicant’s dismissal was a case of genuine redundancy.
Conciliation of the matter before the Commission failed to achieve a resolution and consequently the matter was listed for hearing/conference before me on 23 December 2021. After hearing from the parties, I determined to conduct a hearing pursuant to s.399 of the Act.
At the hearing, the Applicant was self-represented and gave evidence himself. He also called evidence from Mr Mark Desira who is the Electrical Network Superintendent for the Respondent and was ordered by the Commission to attend the proceedings on application of the Applicant.
Mr E Mentiplay of Johnson Winter & Slattery was granted permission to appear on behalf of the Respondent pursuant to s.596(2)(a) of the Act. Mr Mentiplay called Mr Frank Denino, Manager - Power & Overhead for the Respondent, to give evidence.
Background and evidence
On 16 April 2018, the Applicant commenced in the role of Team Manager, Power Operations Centre reporting to Mr Frank Denino, Manager, Power and Overhead. At the time of his dismissal, the title of the Applicant’s position was that of Team Manager Power and Substations. The Applicant’s primary place of employment was the Tram Hub, Level 3, 555 Bourke St Melbourne. The terms and conditions of the Applicant’s employment along with a position description (Team Manager Position Description) for the role were set out in an offer of employment dated 10 April 2018[1] (the Letter of Employment). The Applicant was not covered by an award or enterprise agreement.
The Applicant’s total remuneration on commencement of employment with the Respondent was $147,825 which included a base salary of $135,000 plus mandatory superannuation contributions[2]. The Applicant was also entitled to the use of a fully maintained company-supplied motor vehicle which was a Toyota Camry and was provided for use in accordance with Company policy. All tolls incurred by the Applicant while using the company vehicle were paid by the Respondent[3].
In his role, the Applicant was responsible for managing the Power Control team, which comprised a team of Network Controllers and the Substation Team. The former team manages the operation of the Respondent’s 600VDC electrical distribution network, while the latter team is responsible for the maintenance of the substation network comprising approximately 60 substations. The Applicant was responsible for rostering staff of the two teams, ensuring that targeted maintenance plan objectives were delivered within budget and providing high level support to those managing and carrying out maintenance activities[4].
As a salaried employee, the Applicant’s hours of work were that of the Respondent’s normal business hours Monday-Friday, although he could be called out after hours during the week and/or on the weekend to attend to emergencies[5]. According to Mr Denino, the Applicant was responsible for the management of relevant staff including hiring, discipline, termination, rostering, leave management and succession planning. He also states that the role had authority to incur expenditure up to $5,000 without further approval[6].
The Applicant was off work on workers compensation from 12 April 2021 until the date of his dismissal on 23 September 2021[7]. In accordance with the Respondent’s vehicle policy the Applicant returned the motor vehicle to the Respondent on or about 14 April 2021 when he commenced the period of absence on workers compensation[8].
Organisational structure review
Mr Denino states that in early 2021 a new organisational safety structure was implemented, overseen by the Respondent’s Chief Safety Officer. The new structure included a new Senior Electrical Safety Authority, resulting in many of the safety compliance duties and responsibilities formerly performed by Mr Denino being transferred to the Health and Safety team. At the same time, financial planning activities in the Power and Overhead team were allocated to a new role of Power and Works Coordinator[9].
Considering the organisational structure changes referred to above, Mr Denino states that he undertook a review of the Power team as part of an organisation wide review known as Project Orange. Mr Denino agreed that at the time of his review in July 2021 he was aware that the Applicant wanted to return to work but was of the view that a part-time return to work as sought was not feasible in the Manager role then occupied by the Applicant.
Arising from his review of the organisation structure, Mr Denino identified that a new role of Electrical Networks Superintendent – Control Room/Substations (the Superintendent Role) was required. The new role identified by Mr Denino would be covered by the Yarra Trams Enterprise Agreement 2019 Infrastructure[10] (the Agreement) and would be remunerated at the classification level of Power Centre Operator – Level 4 (PCO4). A position description[11] (the Superintendent Position Description) for the proposed Superintendent Role was created by Mr Denino in July 2021. Mr Denino identified that the incumbent of the new Superintendent Role;
· would be responsible for day-to-day supervision of the Power team members in the control room and substations allowing the Manager, Power and Overhead to focus on governance;
· was required to have technical knowledge and skills to enable them to provide practical advice and perform problem solving on the network;
· required a minimum of 10 years’ experience working on the Respondent’s substations and electrical networks;
· must provide direct technical support and advice to the team in their day-to-day activities;
· must have knowledge and experience in the electrical network required for emergency management activities;
· must have the necessary knowledge of electrical integrity, safety and security to ensure optimal operational performance; and
· must understand resourcing requirements within the substation and control teams to enable delivery of planned rosters and shift coverage.[12]
Mr Denino described the Superintendent Role as a “senior technical and supervisory role,” does not hold any management authority, has supervisory responsibility for 28 staff, has no authority to discipline employees and has no responsibility for managing employee absences, implementing asset management plans, or managing staff development. Any expenditure of the Superintendent Role must be approved by Mr Denino. As the Superintendent Role is covered by the Agreement, the Superintendent works according to a roster and may be rostered to work afternoon and nightshifts and can be required to perform any PCO functions including working on the power control panels if required[13].
The Applicant calls into question the evidence of Mr Denino as to when the restructure was planned and when the Superintendent Position Description was developed. The Applicant refers to the Document Author and approved date of the Superintendent Position Description which is shown in the footer of the position description. It identifies the author as the HR Manager Anastasia Perrin and the approved date of 18 March 2021[14]. The Applicant questions the capacity of a HR Manager to prepare a position description dealing with the necessary technical information relevant to a PCO4 level role. Mr Denino states in reply that the information in the footer to which the Applicant refers is the date the position description template was created and that the relevant HR Manager was the person that approved the template. He confirmed that he prepared the Superintendent Position Description in July 2021[15].
Mr Denino further states that because of the earlier organisational restructure there were several changes that impacted on his team’s organisational structure, specifically;
· with respect to the new Senior Electrical Safety Authority role, Mr Denino now had the capacity to perform the governance related functions of the Applicant’s role, including managing the Respondent’s relationship with the regulator and implementation of procedures and standards;
· The budget compliance activities previously undertaken by the Applicant could be undertaken by the Power and Works Coordinator who had a finance background; and
· The safety related functions of the team could be absorbed by the Health and Safety team which had recently increased in size and capability.[16]
The combination of the organisational structure and responsibility changes led Mr Denino to conclude that the Applicant’s role of Team Manager, Power and Substations, was no longer required. The recommendation for redundancy was set out in a business case dated 12 August 2021[17] (the Redundancy Business Case). The benefits identified by Mr Denino in the Redundancy Business Case were as follows;
“……………
Benefits
1. Greater focus with the PCO4 responsible and required to be able to fulfil and provide:
· Fundamental Tram Electrical Network Knowledge
· Fundamental Tram Operational Network Knowledge
· Tram Substation Knowledge
· Yarra Trams Safe systems of work
2. Greater functional oversight on budget and standards/procedures being absorbed by Power & Overhead, Manager
3. The proposal would deliver cost savings within the Power team of $130,000 - $150,000 pa.
………..”[18]
Mr Denino explained that the identified savings arose from the non-replacement of Mr Desira’s PCO3 role from which he was promoted to the new PCO4 Superintendent Role. This meant that the number of PCO3 roles reduced from 11 to 10. The Applicant challenged the savings put forward by the Respondent and claimed that the reduction of a PCO3 role was a false economy as additional overtime would need to be worked to cover that reduction. Mr Desira resisted that proposition and stated that increased overtime in recent months was not attributable to the reduced number of PCO3 roles but rather, was due to the impact of Covid-19.
Mr Denino states that he considered whether the Applicant could be redeployed to the new Superintendent Role but concluded that he did not possess the technical knowledge and skills required to provide practical advice and problem solving in respect of the Respondent’s network. Nor did the Applicant possess 10 years’ experience in the Respondent’s infrastructure and electrical network management that was necessary to obtain the relevant skills, knowledge and experience to undertake a PCO4 level role. Mr Denino contrasted the Applicant’s experience with that of Mr Desira, who while perhaps less formally qualified than the Applicant, had over 20 years’ network experience. Mr Denino says he also considered whether there were any other suitable roles to which the Applicant could be redeployed to[19].
On 23 August 2021, Mr Denino met with the Applicant and advised him of the changes to be made within the Power team and that his role was to be made redundant. Following the meeting Mr Denino provided the Applicant with a letter dated 23 August 2021 confirming his redundancy[20] (the Redundancy Notice Letter) would take effect on 23 September 2021 if the Applicant did not seek or was unable to secure another position. A list of current vacancies[21] was enclosed with the Redundancy Notice Letter.
On 26 August 2021, the Applicant sent an email to Mr Denino in which he confirmed his understanding of the key points that arose from the 23 August 2021 meeting. The Applicant confirmed receipt of the list of current vacancies and in doing so acknowledged that he was not qualified for the “vast majority” of the vacant roles. The Applicant did not identify any roles that he was interested in being considered for[22].
Mr Denino conceded during cross examination that there was no evidence of a lack of competence on the part of the Applicant in his development of ‘switching programs’ although he states there were certain decisions taken by the Applicant that placed the business at risk (e.g., feeder cable issue). He also accepted that network controllers may have sought advice from the Applicant from time to time although this was incident dependent. As regards formal performance reviews, Mr Denino accepted that the Applicant’s reviews were generally ‘positive’ although some technical, cross-functional and budget issues had been raised.
The Applicant now states that he ought to have been redeployed into the Head of Project Management Office position, which was one of the roles in the current vacancies list provided to the Applicant on 23 August 2021, and further states that he had previously applied for that role[23]. He states that if needed he should have been supported with additional training to fill the role[24]. Mr Denino states in response that the Applicant had previously applied unsuccessfully for a different role in July 2021, that of Manager, Project Management Office. As to the Head of Project Management Office role, Mr Denino states that he considered the Applicant for that role but concluded he was unsuitable as he lacked the necessary experience in tendering and bids for public transport work, or in setting up tendering teams and that he had limited experience in the light rail industry[25].
On 23 September 2021, the Applicant received notice that termination of his employment would take effect on 23 September 2021[26] (Notice of Termination Letter). Consistent with the advice received in his Notice of Redundancy Letter, the Applicant received a redundancy payment equivalent to 7 weeks’ pay on termination. Despite the Applicant stating that he earned less in the 2020/2021 fiscal year because of his workers compensation absence, it was not in dispute that at the date of his termination, the Applicant’s base salary was $153,213[27].
Mr Mark Desira, who had been filling the Applicant’s role in an acting capacity during the Applicant’s absence on workers compensation, subsequently accepted appointment to the Superintendent Role on 2 December 2021 (Superintendent Appointment Letter). The position was a PCO4 role under the Agreement and attracted a base salary of approximately $145,000 on top of which shift and overtime penalties were payable under the terms of the Agreement. Mr Desira was also entitled to a company-maintained motor vehicle. Appointment to the role took effect from 23 September 2021[28]. An updated organisation chart showing the new structure was produced by the Respondent[29]. Mr Desira gave evidence regarding the Superintendent Role, relevantly stating that he;
· had accumulated considerable operational experience prior to his appointment to the PCO4 role through having moved through the PCO1, PCO2 and PCO3 roles over his 20+ years career with the Respondent;
· had no financial authority and required Mr Denino’s approval of all financial expenditure;
· was responsible for weekly rosters;
· was unable to discipline or recommend disciplinary action;
· could be required to work shiftwork;
· could, under the terms of the Agreement, be required to step down into a lower role;
· was required to fill in gaps in the team as required; and
· had become the direct interface between the substations and power operations centre.
When cross-examined in respect of the Applicant’s operational competence, Mr Desira variously stated that;
· he recalled working with the Applicant in the control room once;
· in relation to the damaged feeder cable issue, he recalled ‘running’ the job with the Applicant’s assistance;
· while the Applicant was competent in ‘assisting’ Mr Desira on that day, Mr Desira would not have been comfortable allowing the Applicant to ‘run’ the job;
· the Applicant was considered by the operators as being incompetent in managing the network;
· when there was an issue with the network, Mr Desira would regularly update the Applicant on the status of a job given the Applicant’s responsibility to keep more senior management informed; and
· he could not say how often the Applicant attended substations out of hours but referred to his own experience over the last 6-9 months which had only required out of hours attendance on a couple of occasions.
Mr Desira conceded during cross examination that the title of his role appearing in his email had not been updated since his appointment to the role and still reflected the title of ‘Manager’ that he had been acting in while the Applicant was on workers compensation.
Mr Denino confirmed during cross examination that the position filled by Mr Desira was not advertised to the broader PCO3 pool of operators due to their being a small pool of candidates capable of filling the role and Mr Desira being the preferred candidate.
The Applicant states that the redundancy of his role was to remove the person and not the role and that the role still exists, albeit it has been relabeled as a PCO4 role. He seeks to draw support from the actions of the Respondent since the dismissal, including that;
· the Respondent failed to update the organisational chart in an accurate and timely manner[30];
· the Respondent had failed to formally notify staff of the organisational changes when it was normal practice for such notification to occur[31]; and
· the ESSOW – Provision of Standard Isolation Programs Work Instruction (the ESSOW Work Instruction) version 5, which was reviewed and updated on 30 September 2021 (7 days after Applicant’s dismissal) still shows the Work Instruction Author as the Team Manager – Power and Substations.
The Applicant also gave the following relevant evidence during cross-examination. He states that;
· he held a management role;
· was unable to discipline employees by reason of a direction from HR;
· did not have authority to spend money, contrary to what is stated in his position description;
· worked Monday-Friday, was not covered by the Agreement, and consequently could not be required to work shiftwork;
· could not be required to work in a lower classification (e.g. PCO3); and
· drove his vehicle to/from work and for incidental personal use.
Motor Vehicle
Following the Applicant’s dismissal, the Respondent prepared a summary of the Applicant’s company vehicle usage, including kilometres travelled and eTag (toll) charges incurred. That summary is as follows;
Period Kilometres travelled Tolls incurred 1 January 2019 to 31 December 2019 17,809km $1,924.45 1 January 2020 to 31 December 2020 21,542km $3,535.64 14 April 2020 to 14 April 2021 (being the 12-month period prior to the vehicle being returned to Yarra Trams) 23,431km $2,871.27
No logbook was maintained that recorded business and private use of the Applicant’s company vehicle, in the absence of which Mr Denino estimates that the Applicant’s private vehicle usage was approximately 70% of the total kilometres travelled. That figure was calculated based on an estimate of the number of kilometres which the Applicant was required to travel for work purposes having regard to;
“(a)the distance between Mr Grieg’s two primary work locations (E-Gate and the Tram Hub), which is approximately 5km return. Assuming this trip was taken 5 days per week for 48 weeks of the year, this accounted for approximately 5-6% of the total kilometres travelled by the vehicle; and
(b)travel undertaken by Mr Grieg to substations on the network (an average of 10km return, which occurred approximately once a month or less). This accounted for approximately a further 5% of total kilometres travelled.”[32]
Mr Denino further states that a generous assumption of 30% business use was made to ensure that the estimate of vehicle use for work related purposes was not under-estimated[33].
In relation to required out of hours travel, Mr Denino agreed that there was a requirement for the Applicant to attend various substations or sites directly from home outside of normal working hours due to emergencies. Such a requirement was irregular and infrequent according to Mr Denino and he estimates that such a requirement would have arisen 2-3 times over a 12-month period. Mr Desira similarly estimates that the incidence of out of hours site attendance from home was low and that he had only been called out a “couple of times” over the past 6-9 months. Both Mr Denino and Mr Desira agreed that the Applicant (and Mr Desira in the new Superintendent Role) were regularly required to attend Respondent sites during their normal working hours and in doing so were required to use their company motor vehicle.
The Applicant claimed for the following reasons that none of the travel in the company motor vehicle should be considered personal use. The Applicant states that;
· the motor vehicle was predominantly a tool of trade and that he was always ‘on duty;’
· he was required to undertake site and office attendance ‘as and when required;’
· the FBT declaration filed in respect of the car always stated that the motor vehicle was for 100% business use;
· he was required to carry bulky tools essential to performance of his work; and
· in calculating annual kilometres travelled in the motor vehicle the Respondent had not used the 12-month period immediately preceding the Applicant’s dismissal, which he attributes to the extended period for which he was on workers compensation and did not have use of the vehicle.
Putting the above threshold objections to one side for the time being, the Applicant rejects the Respondent’s 70% estimate of his use of the company vehicle for private use and states that his personal use of the vehicle was limited to travel between home and work and that in any case he did not have use of the company vehicle from 14 April 2021 to the date of his dismissal while he was on workers compensation. He also challenges the Respondent’s assumption of the distance he was required to travel between home and work.
The Applicant states that he lives in Murrumbeena and the return distance to and from work was 39km (worst case) and was at times a lesser return distance of 35.2km (to/from 55 Bourke Street) or 10.2km (to/from Camberwell Substation) due to his attending those work locations which were closer to his home. The Applicant did not give evidence as to the incidence of his attendance at the closer work locations. He further states that the only deviation he ever took in travelling to and from work was minor in that he would occasionally stop off at the Chadstone Shopping Centre on the way home from work, which would add less than a kilometre to the normal return trip of 39km. The Applicant also states that he did not use the company vehicle for private use on a weekend or during holiday periods, that restriction on vehicle usage being consistent with clause 7.17 of the Respondent’s Control & Use of Motor Vehicle policy which relevantly states as follows in respect of private usage of a company vehicle;
“7.17 Private Usage
Rule:All Yarra Trams provided motor vehicles shall be used for 100% business purposes.
Rule:Personal use of Yarra Trams motor vehicles must be approved in writing by the respective Functional Director.
Rule:The Authorised Driver must utilise the motor vehicle Usage Declaration to declare the number of days the motor vehicle was available for personal use.
Requirement: Yarra Trams motor vehicles may only be used for private purposes under the following conditions:
· Private usage is limited to travel to and from work; and
· The private usage is incidental to normal travel during business usage; and
· The private usage is minor, infrequent and irregular.”
The Applicant was unable to account for the significant additional kilometres travelled by him in each 12-month period beyond his conceded travel to and from work. He attributed the significant additional kilometres travelled to the various out of hours callouts and site trips undertaken during normal working hours. He did not, however, challenge Mr Denino’s and Mr Desira’s evidence regarding the low incidence of after-hours call-outs. Nor did he directly challenge the assumptions made by Mr Denino regarding the average number of trips (and distance) undertaken by him in his company car each week during normal working hours.
Mr Desira did not agree that the Applicant was required to carry ‘bulky equipment’ in the vehicle. He did not dispute that the Applicant was required to maintain relevant safety equipment in his vehicle that would allow him to attend substations and other sites during or after hours. According to Mr Desira, the equipment included normal personal protective equipment (PPE) and other required safety equipment which could fit in a small box and did not prevent other personal items being placed in the boot of the vehicle when required.
Has the Applicant been dismissed?
A threshold issue to determine is whether the Applicant has been dismissed from his employment. Section 386(1) of the Act provides that the Applicant has been dismissed if:
(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or
(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.
Section 386(2) of the Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant. There was no dispute and I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent.
Initial matters
Under section 396 of the Act, the Commission is obliged to decide the following matters before considering the merits of the application:
(a)whether the application was made within the period required in subsection 394(2);
(b)whether the person was protected from unfair dismissal;
(c)whether the dismissal was consistent with the Small Business Fair Dismissal Code; and
(d)whether the dismissal was a case of genuine redundancy.
Was the application made within the period required?
Section 394(2) requires an application to be made within 21 days after the dismissal took effect. It is not contested that the Applicant was dismissed from his employment with effect from 23 September 2021 and made the application on 4 October 2021. I am therefore satisfied that the application was made within the period required in subsection 394(2).
Was the Applicant protected from unfair dismissal at the time of dismissal?
Section 382 of the Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
Minimum employment period
It was not in dispute, and I find that, at the time of the Applicant’s dismissal, the Respondent employed approximately 2500 staff and was consequently not a small business employer. The Applicant commenced his employment with the Respondent on 16 April 2018 and was dismissed on 23 September 2021, that being a period of employment of approximately 3.5 years. I am therefore satisfied that, at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period of six months.
High income threshold
Before turning to consider whether the annual rate of earnings of the Applicant were below the HIT, I must firstly establish whether the Applicant was covered by a modern award or enterprise agreement. The Applicant did not contend that he was covered by either a modern award or enterprise agreement. I have also considered whether the role would fall within the coverage of a modern award and have concluded that it would not, having regard to the seniority of the role and the management responsibilities. I am satisfied that the Applicant was not covered by a modern award or enterprise agreement in his employment with the Respondent.
I now turn to consider whether the sum of annual rate of earnings of the Applicant exceeds the HIT. Section 332 of the Act relevantly defines “earnings” as follows:
“332 Earnings
(1)An employee’s earnings include:
(a) the employee’s wages; and
(b) amounts applied or dealt with in any way on the employee’s behalf or as the employee directs; and
(c) the agreed money value of non-monetary benefits; and
(d) amounts or benefits prescribed by the regulations.
(2)However, an employee’s earnings do not include the following:
(a) payments the amount of which cannot be determined in advance;
(b) reimbursements;
(c) contributions to a superannuation fund to the extent that they are contributions to which subsection (4) applies;
(d) amounts prescribed by the regulations.
Note: Some examples of payments covered by paragraph (a) are commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).
(3)Non-monetary benefits are benefits other than an entitlement to a payment of money:
(a) to which the employee is entitled in return for the performance of work; and
(b) for which a reasonable money value has been agreed by the employee and the employer;
but does not include a benefit prescribed by the regulations.
(4)This subsection applies to contributions that the employer makes to a superannuation fund to the extent that one or more of the following applies:
(a) the employer would have been liable to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the person if the amounts had not been so contributed;
(b) the employer is required to contribute to the fund for the employee’s benefit in relation to a defined benefit interest (within the meaning of section 291-175 of the Income Tax Assessment Act 1997) of the employee;
(c) the Employer is required to contribute to the fund for the employee’s benefit under a law of the Commonwealth, a State, or a Territory.
The HIT is an amount prescribed and worked out by operation of reg. 2.13 of the Fair Work Commission Regulations 2009. Applying the calculation provided by that regulation, the threshold at the time of the Applicant’s dismissal was $158,500.00.
As is clear from clause 332(1)(c) of the Act, it is necessary to include consideration of any non-monetary benefits. In the present case it is contended by the Respondent that the monetary or notional value of the private usage of a fully maintained company motor vehicle should be included in the sum of the annual rate of earnings of the Applicant. This is contested by the Applicant. Relevantly, regulation 3.05(6) of the Fair Work Regulations 2009 provides;
“(6) If:
(a) the person is entitled to receive, or has received, a benefit in accordance with an agreement between the person and the person’s employer; and
(b) the benefit is not an entitlement to a payment of money and is not a non‑monetary benefit within the meaning of subsection 332(3) of the Act; and
(d) the FWC is satisfied, having regard to the circumstances, that:
(i)it should consider the benefit for the purpose of assessing whether the high income threshold applies to a person at the time of the dismissal; and
(ii)a reasonable money value of the benefit has not been agreed by the person and the employer; and
(iii)the FWC can estimate a real or notional money value of the benefit;
the real or notional money value of the benefit estimated by the FWC is an amount for subparagraph 382(b)(iii) of the Act.”
Before turning to the particular circumstances of this case it is useful to set out some relevant case law. In Francesco Zappia v Universal Music Australia Pty Limited T/A Universal Music Australia[34] (Zappia) a Full Bench of Fair Work Australia considered the term annual rate of earnings in an appeal of a decision of Hamberger SDP at first instance. The Full Bench said as follows;
“[8] His Honour dealt with the annual rate of earnings aspect thus:
[9] ... The most natural way of construing the expression annual rate of earnings in s.382 is by reference to the annual rate of earnings at the time of the applicant’s dismissal. If Parliament had wished to refer to the average amount earned over the previous 12 months it could easily have done so. I note, for example, that in setting the compensation cap in relation to unfair dismissal, s.392 specifically refers to the amount that the employee received (or was entitled to) during the 26 week period immediately before the dismissal.”[35]
The Full Bench then concluded as follows;
“[9] On the appeal, Mr I Latham, of counsel, who appeared for the appellant both at first instance and on the appeal, submitted that his Honour had erred in his construction of the expression ‘annual rate of earnings’. In our view his Honour was clearly correct. Section 382 of the Act relevantly provides that a person is protected from unfair dismissal at a time if, at that time, the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold. It is clear that the time at which the annual rate of earnings must be ascertained is at the time of the termination of the person's employment. What needs to be ascertained is the annual rate of earnings at that time, not the annual earnings to that time (the amount earned in the 12 months to that time).”[36]
What may be taken from Zappia for the purposes of the present case is that the actual earnings of the Applicant over the 12 months prior to his dismissal on 23 September 2021 is not relevant to the determination of the annual rate of earnings. Rather, it is his actual salary and the monetary or notional value of other benefits at the time of his dismissal that must be determined.
Another relevant consideration in determining the annual rate of earnings is that of what if any impact prolonged periods of absence prior to dismissal due to workers compensation, personal leave or authorised unpaid leave may have on the calculation of the annual rate of earnings. This has been variously considered by the Commission. In Cross v Bechtel Construction (Australia) Pty Ltd[37] (Cross) VP Catanzariti considered the impact of a 15 month absence of the applicant on unpaid leave due to medical reasons in the period prior to his dismissal in conjunction with the dismissed employee’s contractual obligation to work 58 hours per week inclusive of 18 hours overtime. The Vice President relevantly said as follows;
“[15] Prior to being off sick, the Applicant worked 18 hours paid overtime each week. He now contends that he was not entitled to overtime while on unpaid leave. On that analysis it would mean that if a person is on unpaid leave for a year, their earnings for the purposes of s. 332 of the Act would be zero and therefore they would fall under the high income threshold. I am not persuaded that this is the correct construction of the legislation. It is clear on the material before me that but for the sick leave, the Applicant would have been obliged to work 58 hours and would have been paid the regular overtime. The Applicant during his cross-examination of Ms Treglown sought to use the example of overtime not being available in inclement weather conditions as evidence that the overtime was not guaranteed. However, inclement weather conditions or in fact other situations akin to an event of force majeure which are outside the employer’s control, are not indicators of whether overtime is guarantee and the Applicant’s reliance on this evidence is a misapplication of the test and conflates issues. The evidence of an isolated example of overtime not being worked in inclement weather conditions cannot be relied upon to say the overtime is generally not guaranteed. Nor can the argument that the Applicant was on unpaid sick leave be relied upon to form the view that his earnings for the purposes of the legislation did not include overtime.
[16] The correct test for determining the annual rate of earnings for the purposes of s. 332 of the Act, is to determine the rate of earnings at the time of termination of employment, not the actual earnings up to that time. As such, the relevant consideration is whether he would have been expected to work a 58 hour week if he had been otherwise fit, excluding any extraordinary circumstances. The evidence of the Respondent makes it is clear that the Applicant was required to regularly work 58 hours a week, as he had done prior to going on sick leave and he would have been paid for every one of those hours based on the hourly rate equivalent of the base salary.”[38]
More recently, A Full Bench in Paul Dirkis v Staffing and Office Solutions Pty Ltd T/A SOS Recruitment[39] (Dirkis), in considering fluctuations in hours of work in the period prior to dismissal, referred with approval to both Zappia and Cross and then concluded as follows;
“[49] In any event as the Full Bench observed in Zappia, what needs to be ascertained is the annual rate of earnings at that time of the termination of the person's employment, not the actual annual earnings to that time. The Letter of Appointment was clear as to rate of pay and standard working week, and the calculation of the Appellant’s annual rate of earnings by the Commissioner as being $208,000.00 was correct and unexceptional. That the Appellant took unpaid leave does not affect in any way the calculation of his annual rate of earnings.
[50] The interpretation advanced by the Appellant would lead to absurd results. For example, in Cross v Bechtel Constructions (Australia) Pty Ltd , Vice President Catanzariti considered the application of the high-income threshold to an employee who had been on unpaid leave due to medical reasons for approximately fifteen months prior to his termination. There was no suggestion in that matter that time on unpaid leave affected the calculation of the employees annual rate of earnings, and the focus was on the whether the Applicant would have been paid regular overtime prior to being off sick, but the interpretation advanced by the Appellant would result in such an employee falling below the high-income threshold no matter what their income.”
Returning to the present case, the Applicant stated in his evidence that his salary for the fiscal year 2020/2021 was $151,324 and that his earnings in the 12-month period prior to his dismissal were less than that figure due to his period off on workers compensation. He did not however contest that at the time of his dismissal his base salary was $153,213 and that he was entitled to a company provided motor vehicle as part of his conditions of employment.
It follows on the authority of Zappia, and more recently Dirkis, that the period of the Applicant’s absence on workers compensation is not relevant for the purpose of calculating his annual rate of earnings. Rather, it is what the Applicant would have been paid for the performance of his duties had he not been on an extended absence due to workers compensation. That includes the Applicant’s base salary ($153,213) and the notional or monetary value of other benefits to which he was entitled to at the time of his dismissal. I am satisfied that the Applicant’s base salary of $153,213 at the date of dismissal must be included in the sum of the Applicant’s annual rate of earnings.
Turning now to the contested matter of the motor vehicle, the Applicant variously contends that any private use of the motor vehicle should not be considered for the purpose of determining his annual rate of earnings, that any private usage should be discounted for his prolonged absence on workers compensation in 2021 and that the Respondent’s 70% estimate grossly overstates his private usage of the vehicle. It is apparent that absent the inclusion of any real or notional monetary value for the motor vehicle, the Applicant’s annual rate of earnings based alone on his base salary of $153,213, falls below the HIT of $158,500. Consequently, resolution of what if any monetary value is placed on the company provided motor vehicle is central to determining the Respondent’s HIT jurisdictional objection.
In resolving what if any value is attached to the motor vehicle and included in the sum of the Applicant’s annual rate of earnings, it is necessary for me to determine;
· whether the car constitutes a non-monetary benefit;
· whether that benefit should be included in assessing whether the HIT applies;
· whether a reasonable money value has been agreed; and if not
· estimate a real or notional money value of the benefit.
Turning firstly to whether the motor vehicle constitutes a non-monetary benefit. As previously set out above, the Applicant contends that no monetary value should be placed on the motor vehicle for a range of reasons, the relevant points being;
· the motor vehicle was predominantly a tool of trade and that he was always ‘on duty;’
· he was required to undertake site and office attendance ‘as and when required;’
· the FBT declaration filed in respect of the car always stated that the motor vehicle was for 100% business use; and
· he was required to carry bulky tools essential to performance of his work.
I do not accept the Applicant’s submission that he was always ‘on duty.’ There was no such contractual obligation and to suggest such a requirement could be imposed would be, with respect, a nonsense. Nevertheless, the essence of the Applicant’s submission is that the car was a “tool of trade,” was overwhelmingly used for business purposes and as such any private usage was incidental to its business use. It follows on the Applicant’s argument that the private usage of the motor vehicle should not be considered for the purpose of determining his annual rate of earnings. Support for the Applicant’s submission can be found in Rofin Australia Pty Ltd v Newton[40] (Rofin) in which the Full Bench of the Australian Industrial Relations Commission relevantly stated:
“Where a motor vehicle is provided to an employee in lieu of salary that might otherwise have been paid, it is appropriate that the private benefit derived by the employee from the provision of the motor vehicle be counted as part of the employee's remuneration. Where, however, the vehicle is provided for business purposes and the employee's entitlement to private use is purely incidental, the provision of the motor vehicle should be treated no differently to the provision by the employer of any other tool or piece of equipment essential to the performance of the job.”[41]
In considering whether the motor vehicle constitutes a non-monetary benefit in the present case, it is necessary to have regard to the Applicant’s Letter of Employment where it explicitly provides for the provision of fully a maintained motor vehicle. Schedule 2 of the Letter of Employment relevantly details the vehicle entitlement as follows;
“8 A fully maintained company-supplied motor vehicle will be provided to you in accordance with Company policy. The vehicle is supplied primarily for business use to assist in the performance of your role within the business, with limited private use available. Private use of such vehicle is restricted to home to work travel, minor or infrequent use, and other private use which is incidental to the business use of the vehicle. The vehicle is not available for use during periods of annual or long service leave or during periods of personal leave exceeding one month’s continuous duration. Any notional value of the business or private use of the vehicle is not convertible to cash”[42].
The following may be said about the motor vehicle entitlement. While I accept that the vehicle was provided primarily for business use, the Letter of Employment explicitly acknowledged that the vehicle was available for personal use, subject to the Company policy and the contractually expressed limitations on private usage. The contractual provision also acknowledges the notional value that may attach to the motor vehicle entitlement and that any such value could not be cashed out. That is unsurprising in circumstances where the Applicant unarguably required the vehicle to undertake his duties.
As to whether the Applicant’s private use of the motor vehicle was ‘purely incidental’ to its business use, I am not persuaded that such use was ‘purely incidental.’ As previously observed, no logbooks were maintained, and the Applicant offered no probative evidence to rebut the evidence and assumptions of Messrs Denino and Desira going to the Applicant’s required motor vehicle travel during business hours and the low incidence of out of hours callouts. I consequently accept that evidence which leads me to conclude that the Applicant’s private vehicle usage was approximately 70%. In these circumstances I am satisfied that while the Applicant’s company-maintained motor vehicle was provided primarily for business purposes, private usage of the vehicle of the Applicant was not ‘purely incidental.’
It follows from the above and I am satisfied that the private usage by the Applicant of his company-maintained motor vehicle constituted a non-monetary benefit and that the value of that benefit should be included in the calculation of the sum of the annual rate of earnings of the Applicant. The parties had not agreed to a notional or monetary value for the motor vehicle. Therefore, it is necessary for me to determine a monetary value to be included in the calculation of the annual rate of earnings.
In H.W. Fewings v Kunbarllanjnja Community Government Council[43] (Fewings) the Full Bench of the Australian Industrial Relations Commission held that the most appropriate method of calculating the monetary value of the benefit of the private use of a motor vehicle was to apply the following formula:
1. Determine the annual distance travelled by the vehicle in question.
2. Determine the percentage of that distance that was for private use.
3. Multiply the above two figures to obtain the annual distance travelled for private purposes.
4. Estimate the cost per kilometre for a vehicle of that type (may be obtained from RACV, NRMA or other similar motoring association).
5. Multiply the annual distance travelled for private purpose (obtained at step 3) by the estimated cost per kilometre.
Turning firstly to the annual distance travelled by the vehicle in question. The Respondent provided data for three different 12-month periods, that of the 2019 and 2020 calendar years and the 12 month-period from 14 April 2020 to 14 April 2021. The latter period was chosen by the Respondent as it was the 12 month period immediately preceding the return of the motor vehicle by the Applicant on commencement of his period on workers compensation from 14 April 2021.
The Applicant submits that the period between 14 April 2021 and 23 September 2021 should be considered in calculating the annual distance travelled by the vehicle in the 12-month period immediately preceding his termination of employment. Such an approach would in my view be inappropriate and inconsistent with the reasoning in Zappia and Dirkis. It is necessary to determine the value of the motor vehicle benefit at the date of dismissal based on the assumption that the Applicant was able to perform his normal duties. In order to do so it is necessary in my view in to consider a full 12-month period in which the vehicle was available for the Applicant’s use. While a lesser period of data could be used in circumstances where an employee had less than 12-month’s service for example, it would still be necessary to extrapolate the data of that lesser period to over a 12 month period to ascertain the “annual distance” travelled. In the present case, the most recent full 12-month period in which the Applicant had the use of the motor vehicle was the period ending 14 April 2021.
The distance travelled over that 12 month period ending 14 April 2021 was 23,431km of which the Respondent estimates that 70% of that usage was for private use. Tolls incurred totalled $2,871.27 in the same period. The Respondent’s estimate of private usage includes assumptions regarding travel by the Applicant within his ordinary hours of work between the Applicant’s normal business location and other sites of the Respondent and is set out above at [31]-[32]. With the assumptions included in the Respondent’s analysis, the total business use is just above 10%. Consequently, the 70% private use estimate appears quite conservative and would allow for significant additional business travel both inside and outside of ordinary hours of work. Those assumptions while criticised by the Applicant were not rebutted by any detailed analysis. I am satisfied that the 70% private usage estimate is sound and reasonable.
Using the 70% private usage estimate and applying it to the 12-month period ending 14 April 2021 results in the following calculation per the Fewings formula;
Step 1: Annual distance travelled by the vehicle = 23,413 km
Step 2: Private vehicle percentage determined = 70%
Step 3: Annual distance of 23,413km x 70% = 16,389km
Step 4: RACV cost per kilometre for Toyota Camry = .6856c[44]
Step 5: 16,389 x .6856c = $11,236.37
To the figure of $11,236.37 must be added the value of tolls incurred which in the relevant period will be 70% of $2,871. 27, that being $2009.89. That results in a total value of the motor vehicle of $13,246.26.
Noting that the 12 month period ending 14 April 2021 had a higher kilometre travelled figure then the 2019 and 2020 calendar years it is useful to also consider the figure of the lowest kilometre travelled 12-month period for which data was provided, that being the 2019 calendar year. In that 12-month period the vehicle travelled 17,809km and $1,924.45 in tolls were incurred. The resulting Fewings calculation is as follows;
Step 1: Annual distance travelled by the vehicle = 17,809 km
Step 2: Private vehicle percentage determined = 70%
Step 3: Annual distance of 23,413km x 70% = 12,466km
Step 4: RACV cost per kilometre for Toyota Camry = .6856c
Step 5: 12,466 x .6856c = $8,546.90
To the above derived figure of $8,546.90 must be added the value of tolls incurred which in the relevant period will be 70% of $1,924.45, that being $1,347.12. That results in a total motor vehicle value of $9,894.02.
If, however I am wrong in my assessment of the private usage and were to take the Applicant’s case at its highest, it would require me to estimate the Applicant’s private usage on the assumption that the only private vehicle usage of the motor vehicle was the Applicant’s travel to and from work with very minor occasional detours via Chadstone Shopping Centre on the way home from work which added less than 1 km to the return trip. As set out above at [37], the Applicant says that the maximum return trip to/from work was 39km and was less depending on his travel to closer work locations. No information was provided to make any assessment of how often he travelled to the various closer locations he identified. However, noting that the Applicant’s nominal work location was stated as 555 Bourke St in his Letter of Employment, I propose to use that location as an ‘average’ for the purpose of estimating his private usage. On the Applicant’s figures, travel to and from that location from home involved a round trip of 35.2km.
Taking the daily travel distance of 35.2km and applying that over a 12 month period requires further assumptions to be made including deduction of 4 weeks annual leave, a further deduction of 2 weeks for public holidays and a further week’s deduction for personal leave and other absences. This results in an assumption of 45 weeks (Monday-Friday) of travel to and from work per annum. The annual kilometres travelled calculation then derived, based on these assumptions, is that of 45 weeks x 5 days per week x 35.2km/day = 7,920km for private use of the motor vehicle over a 12 month period.
Applying the above annual kilometres of private travel to the 12-month period ending 14 April 2021 yields a private usage percentage of 7,920/23,413 = 33.8%. The following Fewings calculation results;
Step 1: Annual distance travelled by the vehicle = 23,431 km
Step 2: Private vehicle percentage determined = 33.8%
Step 3: Annual distance of 23,413km x 33.8% = 7,920km
Step 4: RACV cost per kilometre for a Toyota Camry = .6856c
Step 5: 7,920km x .6856c = $5429.95
To the above derived figure of $5,429.95 must be added the value of tolls incurred which in the relevant period will be 33.8% of $2,871.27, that being $970.49. That results in a total annual motor vehicle value of $6,400.44.
If I were to also apply the Applicant’s case at its highest in respect of the lowest kilometres travelled 12-month period (in 2019), the following calculations would follow. Applying the travel to/from work figure of 7,920km per annum calculated above at [74], this would result in the following private use percentage of 7,920/17,809km for the 2019 calendar year which equals 44.5%. Applying Fewings would yield the following;
Step 1: Annual distance travelled by the vehicle = 17,809 km
Step 2: Private vehicle percentage determined = 44.5%
Step 3: Annual distance of 17,809 x 44.5% = 7,920km
Step 4: RACV cost per kilometre for a Toyota Camry = .6856c
Step 5: 7,920km x .6856c = $5429.95
To the above derived figure of $5,429.95 must be added the value of tolls incurred which in the relevant period will be 44.5% of $1,924.45, that being $856.38. That results in a total annual motor vehicle value of $6,286.33.
While I have considered the Applicant’s evidence and submission regarding his private use of the vehicle being limited to travel to/from work, I find that submission to be unpersuasive in the absence of evidence as to the incidence of business use of his vehicle during ordinary hours of work and in respect of out of hours call-outs. I am consequently comfortably satisfied that the monetary value to be attributed to the motor vehicle benefit the Applicant was entitled to, is $13,246.26 in accordance with the Respondent’s calculation. That figure must be added to the Applicant’s base salary of $153,213, to which he was entitled on 23 September 2021, to determine the annual rate of earnings. The total annual rate of earnings is therefore $166,459.26 which is above the HIT of $158,500.
However, if I am wrong in my assessment and taking the Applicant’s case at its highest, the annual value of the motor vehicle of $6,400.44 derived at [75]-[76] above, must be added to the base salary of $153,213 which results in a total annual rate of earnings of $159,613.44 which is also above the HIT. Alternatively, if I were to calculate the value of the motor vehicle based on kilometres travelled in the 2019 calendar year, then the annual rate of earnings would be calculated by adding $6,286.33, derived above at [77]-[78], to $153,213 which equals $159,499.33. Again, the annual rate of earnings of the Applicant arrived at is in excess of the HIT.
It follows from the above and I am satisfied that the Applicant’s annual rate of earnings is above the HIT. As such he is not a person protected from unfair dismissal and his application for an unfair dismissal remedy must be dismissed.
If, however I am wrong in my conclusion in respect of the HIT objection, it is appropriate for me to also consider the genuine redundancy objection raised by the Respondent, to which I now turn.
Was the dismissal a case of genuine redundancy?
Section 389(1) of the Act sets out the meaning of genuine redundancy and relevantly states as follows:
“389 meaning of genuine redundancy
(1)A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy”
Section 389(2) of the Act provides for an exclusion to that which would otherwise fall within the definition of genuine redundancy and relevantly states as follows:
“(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
Was the Applicant’s job no longer required – s.389(1)(a)?
I turn first to consider whether the Respondent no longer required the Applicant’s job to be performed by anyone because of the operational requirements of the Respondent.
A Full bench considered the meaning of the term “genuine redundancy” in Ulan Coal Mines Limited v Henry John Howarth and others[45] (Ulan) and relevantly stated as follows:
“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might 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. In these circumstances, it was said that:
“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…” (at p.308)
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
[18] In Kekeris v A. Hartrodt Australia Pty Ltd Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed -=by the applicant still exists.”[46] (references omitted)
It follows from the Full Bench’s reasoning in Ulan and the summary of relevant cases cited in their decision that:
(i)A job is a collection of functions, duties and responsibilities assigned to a particular employee within an organisation;
(ii)The functions, duties and responsibilities may cease to be part of an employee’s job through a reorganisation or redistribution of duties;
(iii)Should there no longer be any functions or duties to be performed by a particular employee, then his or her job ceases to exist;
(iv)The fact that the tasks and duties previously performed by an employee may have survived and been reallocated to other employees through a restructure does not mean the job is still required; and
(v)An employee’s dismissal may be a genuine redundancy even though particular functions, duties and responsibilities previously performed by that employee are being performed by other employees.
The Respondent submits that various organisational structure reviews under the banner of Project Orange have resulted in several changes including; governance and management functions formerly undertaken by the Applicant being absorbed into Mr Denino’s role, transfer of health and safety responsibilities to the Health and Safety team, and budget compliance activities previously undertaken by the Applicant now being undertaken by the Power and Works Coordinator.
With the above-referred reallocation of responsibilities and the capacity of Mr Denino to take on more of the governance functions within the Power and Overhead team, Mr Denino reviewed the need for the Team Manager – Power and Substations role. His conclusion, as set out in the Redundancy Business Case, was that the creation of the new Superintended Role at a PCO4 enabled day-to-day tasks formerly undertaken by the Applicant to be undertaken by the new role but in addition the new role could provide greater technical support in relation to electrical integrity, safety, and security in respect of the Respondent’s network.
The increased capacity of the Superintendent Role to provide technical support to the team arises from the pre-requisites for appointment to the Superintendent Role;
· a minimum of 10 years’ experience in the Respondent’s network operation;
· detailed knowledge of tram electrical network operations inclusive of network control room and power substations; and
· demonstrated experience in substation maintenance and/or construction.
Significantly, the new Superintendent Role does not include several Key Accountabilities that formed part of the former Team Manager – Power and Substations role accountabilities. The key differences in key result areas, as reflected in the position descriptions for the two roles, can be summarised as follows;
· ‘Financial’ (budget management) was weighted at .19[47] of the Team Manager – Power and Substations role and included defined major activities whereas the Superintendent Role is limited to providing ‘budget support’[48].
· ‘Safety’ attracted a .24 weighting in the Team Manager – Power and Substations role. The position description detailed well defined major activities, including that of; embedding a zero harm culture, ensuring competent and safe cost effective operation, providing subject matter expert input, analyse risks and implement controls and implementing action to address non-conformances. By contrast, the Superintendent Role identified the following key performance indicators; leading and supporting the zero-harm culture, actively supporting improved safety processes, and supporting the conduct of safety reviews and improvements in safety systems.
· ‘Customer Service’ attracted a .19 weighting in the Team Manager – Power and Substations role and identified a range of major activities including; implementation of annual asset management initiatives, participation in annual risk management assessment processes, management of team risk profile in order to execute risk mitigation strategy, provide expert advice on tram power operations issues and execution of agreed continuous improvement plans. The Superintendent Role has no equivalent governance key performance indicators.
Further to the above, key differences between the two roles are said to exist by the Respondent in respect of financial expenditure authority, disciplinary action authority, hours of work, rostering, and flexibility to work in lower classifications. The Applicant challenged the Respondent’s evidence as to his expenditure and disciplinary action authority. He stated that contrary to his position description, he needed to obtain Mr Denino’s approval of expenditure even where the amount proposed to be expended fell below the $5,000 threshold stated in the position description. The Applicant also gave unchallenged evidence that he was specifically instructed by HR that he could not initiate disciplinary action without HR approval.
I accept the Applicant’s evidence that his expenditure and disciplinary authority were limited in practice. Those matters aside, I am satisfied that the other areas identified by the Respondent in respect of hours of work and flexibility to work in operator roles are differences of substance. The Applicant freely conceded in his evidence that he could not be required to work on shiftwork and/or backfill operator roles are at a lower level. Those key elements serve to further reinforce the difference between the Superintendent Role and the former Team Manager – Power and Substations role.
It is apparent that the focus of the new role has moved from one of governance, and management of the Power Operations Centre and Substations team as previously existed, to one of supervision and more direct technical support of the team. This is consistent with the restructuring of the role from that of a management level role to a superintendent role covered by the Agreement. This change is significant in that brings with it the capacity for the Superintended Role to be called to cover operators from time to time, work on shift and undertake duties at a lower level. This provides a greater degree of flexibility for the Respondent in use of the role.
The gravamen of the Applicant’s case is that the title of his role has been relabelled to that of Electrical Network Superintendent and reclassified from a Managerial level role to that of a PCO4 level role covered by the Agreement. The substance of the role, according to the Applicant, has not changed. I do not agree for the reasons set out above. However, the Respondent can be rightly criticised for the lack of action on its part in notifying staff of the organisational change in a timely manner, as evidenced by the organisational chart that does not appear to have been properly updated until late November 2021. I also note that Mr Desira has not taken steps to amend his position title on his standard email and it still reflects the Manager role he was acting in for several months.
As regards the Applicant’s complaint that the Superintendent Role Position Description was prepared by a HR staff member some time before the claimed review by Mr Denino, that complaint has no merit in my view. As explained by Mr Denino, which evidence I accept, the reference in the position description to the HR staff member and the date of the position description’s preparation in March 2021 referred to when the position description template was developed. I accept that Mr Denino prepared the position description for the Superintendent Role in July 2021. While the Respondent’s administrative processes in announcing the organisational may have been less than meticulous, they do not in my view detract from the substance of the change in structure.
I am satisfied that the functions, duties, and responsibilities formerly assigned to the Applicant have been redistributed internally to other employees. This has included reallocation of management and governance functions to Mr Denino in the Manager, Power & Overhead role, transfer of budget management accountability to the Power and Works Coordinator and transfer of health and safety accountabilities to the Health and Safety team. The balance of the functions, duties, and responsibilities, those being day to day tasks formerly undertaken by the Applicant, have been assumed by the Superintendent Role. However, the Superintendent Role is qualitatively different to the Team Manager – Power and Substations role in that the former is one of supervision and technical support rather than the latter which was focussed on management and governance. The Superintendent Role consequently requires far deeper technical knowledge of and experience within the Respondent’s power distribution network.
I am satisfied that while the Applicant’s former duties are still required, his role is not. On that basis I am satisfied that the Applicant’s role of Team Manager Power and Substations was no longer required by the Respondent to be performed by anyone because of changes in the operational requirements of the Respondent’s business.
Did the Respondent comply with any consultation obligations – s.389(1)(b)?
Whether the Respondent was required to comply with particular consultation obligations turns on whether the Applicant was covered in his employment by a modern award or an enterprise agreement and where such instrument contains a consultation provision. It is not in dispute that the Applicant was not covered by an enterprise agreement and nor did either the Applicant or the Respondent contend that the Applicant was covered by a modern award.
The subjective opinion of the parties as to whether a modern award covered the Applicant is irrelevant as the application of a modern award is a matter of fact to be determined by the Commission. I am satisfied that the role the Applicant was employed in was a senior management role and consequently was not covered by a modern award. Therefore, s.389(1)(b) does not apply so as to give rise to consultation obligations under a modern award or enterprise agreement.
Would redeployment have been reasonable in all of the circumstances - s.389(2)?
I turn now to consider whether it would have been reasonable in all the circumstances to redeploy the Applicant into another role.
Mr Denino gave evidence that he considered whether the Applicant was able to fill the Superintendent Role but concluded that he lacked the necessary experience within the Respondent’s operations to be able to fulfil the technical support requirements of the role. Self-evidently, while the Applicant was well qualified and experienced in other industry sectors, he lacked the breadth and depth of experience in the Respondent’s power distribution and operations network that was required in the Superintendent Role.
The Applicant was also provided with a list of vacancies when he was given notice of his redundancy on 23 August 2021. He subsequently acknowledged receipt of that list on 26 August 2021 and that he was not qualified for the ‘vast majority’ of the available roles. Further, he expressed no interest in any of the roles at that time although he now submits that he ought to have been considered for the Head of Project Management Office role having previously applied for and been rejected for that role.
A review of the roles in the vacancy list provided on 23 August 2021 reveals a mix of operational, finance, safety, contracts, security, and OH&S roles. While acknowledging he was not qualified for the majority of those roles, the Applicant now identifies in his material[49] that he was qualified for several of the roles although he has not identified in these proceedings how he was qualified for those roles. However, with the exception of the Head of Project Management Office role, the roles which the Applicant contends he was qualified for are assessed by the Applicant as ‘minor roles.’ I infer by that description that the Applicant means that the roles were more junior roles than the position he filled prior to his dismissal. In any case, he only pressed in these proceedings that he ought to have been considered for the Head of Project Management Office role although in doing so he appears to accept that he may have required additional training to do the role.
Mr Denino was clear in his evidence that, contrary to the Applicant’s claim that he had previously applied for and been rejected for the Head of Project Management Office role, the role he had applied for and been unsuccessful in securing in June 2021 was a different role, that of Manager, Project Management Office. Mr Denino also gave unchallenged evidence that he considered the Applicant for the Head of Project Management Office role but concluded that he was not qualified for the role as he lacked the necessary experience in tendering and bids for public transport work, or in setting up tendering teams and that he only had a short period of experience in the light rail industry.
I accept Mr Denino’s evidence as to the Applicant’s lack of suitability for the Head of Project Management role. I am also satisfied that while there were several vacancies at the time of the Applicant’s dismissal, he was either not qualified or the roles were not appropriate given the seniority of the role he filled prior to his dismissal. In any case, he expressed no interest in those roles at the time they were advised to him for consideration on 23 August 2021.
I accept and am satisfied based on Mr Denino’s evidence, which the Applicant did not effectively rebut, that at the time of the Applicant’s dismissal there were no other suitable roles that were available that it would have been reasonable in all the circumstances to transfer the Applicant into. Nor were than any associated entities within which there were any suitable roles to place the Applicant at the time of his dismissal.
Summary on genuine redundancy
For the reasons set out above I am satisfied that the Applicant’s dismissal was a case of genuine redundancy because as at 23 September 2021:
(i)the Respondent no longer required the Applicant’s job to be performed by anyone because of changes in the operational requirements of its enterprise;
(ii)the Applicant was not covered in his employment by a modern award or enterprise agreement therefore the obligation for the Respondent to have complied with particular consultation obligations does not arise; and
(iii) it would not have been reasonable in all the circumstances for the Applicant to be redeployed within the Respondent’s enterprise or the enterprise of an associated entity of the Respondent.
Conclusion
For the reasons set out above I am satisfied that the Applicant’s annual rate of earnings at the date of his dismissal on 23 September 2021 was in excess of the high income threshold of $158,500. I have also determined in the alternative that his dismissal was a genuine redundancy.
It follows from the above that the Respondent’s jurisdictional objections are upheld and that the Applicant’s application for an unfair dismissal remedy must be dismissed for want of jurisdiction. An order giving effect to this decision will be issued in conjunction with this decision.
DEPUTY PRESIDENT
Appearances:
B Grieg, Applicant.
E Mentiplay for the Respondent.
Hearing details:
2021.
Melbourne (by Microsoft Teams):
December 23.
[1] Exhibit R3, Letter of Employment dated 10 April 2018.
[2] Ibid, Schedule 2 at paras 2.2 & 2.2.
[3] Ibid at para 5.
[4] Exhibit R1, First Witness Statement of Mr Frank Denino at [4].
[5] Exhibit R2, Second Witness Statement of Mr Frank Denino at [4].
[6] Ibid at [4].
[7] Exhibit A1, First Witness Statement of Mr Benjamin Grieg, dated 5 December 2021 at para (f).
[8] Exhibit R1 at [17].
[9] Ibid at [6].
[10] AE507948.
[11] Exhibit A17, Position Description – Electrical Network Superintendent.
[12] Exhibit R1 at [7].
[13] Exhibit R2 at [3].
[14] Exhibit A2, Second Witness Statement of Mr Benjamin Grieg at [16].
[15] Ibid at [6].
[16] Ibid at [8].
[17] Exhibit R4, Business case-power department reorganization redistribution of duties, dated 12 August 2021.
[18] Ibid.
[19] Exhibit R1 at [11].
[20] Exhibit R5, Redundancy Notice Letter, dated 23 August 2021.
[21] Exhibit A14, List of current vacancies at 23 August 2021.
[22] Exhibit R6, Email from Applicant to Mr Denino, dated 26 August 2021.
[23] Exhibit A2 at [12].
[24] Ibid.
[25] Exhibit R2 at [5].
[26] Exhibit R7, Notice of Termination, dated 23 September 2021
[27] Exhibit R1 at [15].
[28] Exhibit A15, Superintendent Appointment Letter, dated 2 December 2021.
[29] Exhibit A16, Organisation Chart at 22 November 2021.
[30] Exhibit A2 at [15]
[31] Ibid at [13]-[14]
[32] Exhibit R1 at [19].
[33] Ibid.
[34] [2012] FWAFB 6108
[35] Ibid at [8].
[36] Ibid at [9].
[37] [2015] FWC 3639.
[38] Ibid at [15]-[16].
[39] [2021] FWCFB 154.
[40] (1997) 78 IR 78.
[41] Ibid at pp 82-83.
[42] Exhibit R3, Schedule 2 at para 8.
[43] Print Q0675 (AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998).
[44] Exhibit R8, RACV Toyota Camry Vehicle Costs
[45] [2010] FWAFB 3488.
[46] Ibid at [17]-[18]
[47] Exhibit R3, Schedule 1 Position Description.
[48] Exhibit A17 at p.3.
[49] Exhibit A14.
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