Daniel Haynes v Chubb Security Services

[2013] FWC 8889

[2013] FWC 8889

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Daniel Haynes
v
Chubb Security Services
(U2013/10620)

Senol Akcan
v
Chubb Security Services
(U2013/10621)

COMMISSIONER BULL SYDNEY, 15 NOVEMBER 2013

Application for relief from unfair dismissal, consultation obligations under award/agreement, redeployment, genuine redundancy.

[1] Mr Daniel Haynes and Mr Senol Akcan (the Applicants) were previously employed by Chubb Security Services Limited (Chubb) until they were made redundant on 29 May 2013.

[2] The matters were joined by consent and heard together, as the factual circumstances in each application were similar.

[3] Mr Adam Guy, a Legal Officer from the Transport Workers’ Union of Australia, NSW Branch (TWU) appeared for the Applicants and Mr Nicholas Stevens a solicitor appeared for the Respondent. Mr Stevens was granted leave to appear pursuant to s.596(2) of the Fair Work Act 2009 (the Act).

[4] The Applicants had been employed as Armoured Vehicle Operators (AVOs) at Chubb’s Lane Cove depot. AVOs are based at all three of Chubb’s Sydney branches including Smithfield and Heathcote. 1 Cash room employees were only employed at Lane Cove. The Applicants, together with a fellow employee Mr Leon Gardner were rostered to work “Run 2” which commenced at 14:00 and concluded between 19:00 and 22:00.

[5] There is no dispute that the Applicants’ employment was covered by the Chubb Security Services Limited Armoured Vehicle & Operators (Lane Cove, Newcastle, Smithfield, Heathcote Branches) Enterprise Agreement 2011-2014 2(the Agreement).

[6] On 17 June 2013, the Applicants each made an application under s.394 of the Act for an unfair dismissal remedy alleging that their dismissals by the Respondent were harsh, unjust or unreasonable.

[7] On 12 July 2013, Chubb filed an objection to the unfair dismissal applications on the grounds that the dismissals were a case of genuine redundancy.

Relevant statutory provisions

[8] Section 394(1) of the Act provides that a person who has been dismissed may apply to the Fair Work Commission (the Commission) for an Order under Division 4 granting a remedy for unfair dismissal.

[9] Section 385 of the Act provides as follows:

s.385 What is an unfair dismissal

A person has been unfairly dismissed if FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

(My emphasis)

[10] Section 396 of the Act requires that before considering the merits of an application for an unfair dismissal remedy, the Commission must decide a number of threshold issues:

s.396 Initial matters to be considered before merits

FWA must decide the following matters relating to an application for an order under Division 4 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;

(d) whether the dismissal was a case of genuine redundancy.

(My emphasis)

[11] One effect of s.396 of the Act is, that if a dismissal is the result of a genuine redundancy as put by Chubb, the Commission need not determine whether the dismissal was harsh, unjust or unreasonable (see UES (Int’L) Pty Ltd v Harvey) 3 (UES).

Genuine redundancy

[12] Section 389 of the Act sets out the meaning of genuine redundancy which is not restricted to whether an employee’s job is no longer required:

389(1) A person’s dismissal was a case of genuine redundancy if:

(a) the 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.

389(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 or an associated entity of the employer

(My emphasis)

[13] The Agreement unsurprisingly prescribes Chubb’s obligations to consult employees where they may be subject to change likely to have a significant effect. A decision to restructure resulting in possible redundancies is clearly a matter which would have a significant effect on employees.

[14] The Agreement has two relevant provisions where employees are made redundant.

[15] Clause 35 - Redundancy and clause 38 - Consultation. Clause 35 binds the parties to the Transport Industry Redundancy (State) Award (NSW) (the Award). Clause 4 - Introduction of Change and clause 5 - Redundancy of the Award have application in the circumstances of impending redundancy. Without repeating the entirety of these provisions they clearly require that Chubb discuss with the affected employees and their union the impact major changes are likely to have on them and measures that may be adopted by the company to avert or mitigate the adverse effects of such changes.

[16] Similarly, clause 38 of the Agreement contains obligations on Chubb to hold discussions and provide in writing to the relevant employees all relevant information about the nature of the specific change and measures Chubb is taking to avert or mitigate any adverse effects. In particular, at sub clause 38.3:

“38.3 As soon as practicable after making its decision, Chubb must:

38.3.1 discuss with the relevant Employees and the TWU:

(i) the introduction of the change; and

(ii) the effect the change is likely to have on the Employees; and

(iii) measures Chubb is taking to avert or mitigate the adverse effect of the change on the Employees; and

38.3.2 for the purposes of the discussion, provide, in writing, to the relevant Employees and the TWU:

(i) all relevant information about the change including the nature of the change proposed; and

(ii) information about the expected effects of the change on the

Employees; and

(iii) any other matters likely to affect the Employees.”

[17] The Applicants submit that these consultation/discussion provisions were not complied with, thereby precluding Chubb from being able to rely on the argument that the redundancies are a complete defence to the applications for the purposes of s.389(1) of the Act.

[18] The Applicants further argue that it would have been reasonable in all the circumstances for them to have been redeployed elsewhere within Chubb’s workforce as is required under s.389(2) if the terminations are to be considered genuine redundancies.

Applicants’ Submissions

[19] Central to the Applicants’ submissions is the claim that they were never advised they were to be made redundant or there was a possibility they would be made redundant due to Chubb’s restructuring exercise. While it was known that a restructure was being undertaken, both Applicants gave evidence that at no stage was it made known to them that they could be made redundant.

[20] Mr Haynes stated that in April 2013, he became aware that Chubb was intending to restructure their runs at the Lane Cove depot. He raised concerns with Mr Warwick Irvine the Transport Manager that he had childcare responsibilities, but Mr Irvine was unable to provide any meaningful response.

[21] On 20 May 2013, Mr Haynes received a letter from Mr Brian Lee the Metropolitan Branch Manager which stated that:

● Run 2 would be removed from the daily schedule;

● Chubb was seeking to minimise disruption to all staff; and

● Any remaining displaced employees from Run 2 would be moved to other commercial runs (operating morning runs).

[22] It was not until 28 May 2013, when a meeting was held with Chubb management and TWU representatives that Mr Haynes attended, that the matter was further discussed with him by Chubb. At this meeting Mr Haynes stated that he expressed his frustration at the process and lack of consultation and he expressed a desire to remain on afternoon shifts. The following day while on sick leave, Mr Haynes received notice of his redundancy in writing by courier.

[23] Mr Akcan attested to similar circumstances experienced by Mr Haynes. Mr Akcan became aware of a restructure in April 2013, but was told not to worry by Mr Irvine as he would be reallocated with a minimum amount of fuss. Mr Akcan received correspondence dated 20 May 2013, advising of the removal of his shift being Run 2.

[24] Mr Akcan stated that around 20 May 2013, he was contacted by his TWU delegate about a meeting he was required to attend with Chubb. On the 26 May 2013, he drafted a letter with assistance from the TWU site delegate regarding his personal circumstances and his desire to remain on afternoon shift until the end of the year. On 28 May 2013, together with Mr Haynes and TWU representatives, Mr Akcan attended a meeting with Chubb management, where he presented his letter.

[25] Mr Akcan’s letter referred to his preference to hold his position until the end of the year due to family commitments. At this meeting, Mr Akcan stated that he qualified the end of the year as being at least the end of August 2013, to sort matters out with his family. He was told by Chubb that they would get back to him shortly. Mr Akcan’s evidence was that the possibility of him being made redundant was not raised at this meeting.

[26] On 29 May 2013, just prior to commencing his shift Mr Akcan was advised that his position had been made redundant.

[27] Evidence was also given by Mr Maki Danalis an Organiser with the TWU, who recounted his discussions with the Applicants, the site TWU delegate and Chubb. On 23 May 2013, Mr Danalis attended a meeting with the site delegate and Chubb management where he raised concerns about the Applicants and their family responsibilities.

[28] Both Applicants’ submit that the failure of Chubb to notify them that redundancy was a potential outcome of the restructure was a breach of the Agreement. The Applicants’ submit that even if the consultative requirements of the Agreement were met, the redundancies were not genuine as it was reasonable for the Applicants to be redeployed.

Respondent’s Submissions

[29] It is put by Chubb that the Applicants’ terminations were the result of genuine redundancies. Furthermore, opportunities for redeployment were considered (although this would have meant three other AVOs would have been made redundant) but did not exist due to the Applicants’ personal circumstances. Chubb argued that they met all the consultative obligations placed on them by the Agreement. These obligations have been discharged by the following activities:

● Consultation with the TWU regarding organisational change and potential redundancies during 2012 and 2013;

● Tool box meetings, and in particular, one held where the Applicants were present on 18 April 2013;

● Letter of advice to the Applicants dated 20 May 2013;

● Meeting with the Applicants on 28 May 2013.

[30] Chubb called the following witnesses to give evidence:

● Mr Owen Sommerville - General Manager, New South Wales and Australian Capital Territory

● Mr Brian Lee - Metropolitan Branch Manager

● Warrick Irvine - Transport Manager

[31] The position put by Chubb was that in the first half of 2012, a national contract for two large clients was lost having a significant impact on the financial performance of the business with a forecast downturn in net revenues of 30% for the financial year. Employees most affected by this were AVOs and cash processing employees in New South Wales and the Australian Capital Territory. Chubb’s Heathcote branch closed in late August/early September 2012. The Lane Cove Run 2 which the Applicants were rostered on was only taking around five hours to complete, whereas, the Applicants were being paid for eight hours. A run review undertaken by Mr Lee and Mr Irvine, concluded that the Lane Cove Run 2 could be abolished with the work being redistributed to other runs.

[32] On 15 May 2012, the Managing Director sent written advice to all employees titled “Business Update” where employees were informed of the loss of the two contracts and other business developments.

[33] Mr Sommerville’s evidence was that since mid 2012, 25 cash processing employees and 16 administrative and managerial positions had been made redundant as a direct consequence of the loss of the two major contracts. On 20 May 2012, Mr Sommerville contacted the TWU to advise of the dire financial circumstances facing Chubb and a meeting was held on 30 July 2012, with TWU officials and delegates at which the question of redundancies was addressed.

[34] On 18 April 2013, Mr Irvine at a tool box meeting advised the Applicants that a run review was occurring and changes were expected to occur.

[35] On 1 May 2013, Mr Sommerville held a meeting with TWU officials and site delegates, where the review of runs was discussed.

[36] On 12 May 2013, Mr Sommerville received an email from a Mr Leon Gardner who worked on Run 2 with the Applicants. While raising issues personal to him, Mr Gardner’s email purported to express the views of his colleagues, that is, the Applicants. Pertinent comments of Mr Gardner’s email are extracted below:

● On 19 April 2013, following a conversation with Supervisor Jason Furtner regarding the speculation about the dissolution run 2 shuttle (sic) myself and other team members (Daniel Haynes and Senol Akan (sic)) decided to approach Mr. Warwick Irvine (Transport Manager) of our own initiative to try and ascertain the facts. Mr Irvine advised that run 2 shuttle would be dissolved as of the 29 April 2013 and we were to be placed on any available shifts on the roster. No written validation or notification was received by myself or my colleagues at this time.

● My colleagues and I clearly advised Mr Irvine we are unable to work morning shifts due to personal commitments configured around family responsibilities that were set in place at the time of appointment to our respective afternoon shifts rosters.

...

● When I sought further explanation from Mr Christanopoulos about whether I was technically redundant, he advised me that he had no answers but was under the impression that ‘there had to be more people made redundant’.

(My emphasis)

[37] On the following day Mr Sommerville responded by email to Mr Gardner confirming that Run 2 was to have ceased operating from 29 April 2013, but this cessation was to be delayed until 13 May 2013, while consultation occurred with the TWU. Mr Sommerville acknowledged in his email the following:

● You, and other employees, were not provided a reasonable opportunity to raise any concerns you had with the proposed changes, particularly any difficulties you may have in meeting any proposed shift changes.

[38] Mr Sommerville’s response went on to say:

● Run 2 is to be temporary (sic) reinstated as of Tuesday 14th May 2013.

...

● You will be advised in writing, in accordance with Clause 38.3.2 of the Enterprise Agreement, of all relevant information concerning the proposed change, the expected effect of the change and any other matter considered relevant.

● A meeting will be convened between Brian Lee, Warwick Irvine, the TWU and effected (sic) employees in an attempt to resolve any shift difficulties. It should be noted, however, that it may not be possible to meet the needs of all affected employees.

[39] On the 16 May 2013, Mr Sommerville met with Mr Lee and Mr Irvine where they concluded that at least three permanent AVOs would have to be made redundant following the run restructure.

[40] On the 20 May 2013, the Applicants and Mr Gardner were issued with a letter signed by Mr Lee stating that Run 2 would be removed from the daily schedule and that Chubb was seeking to minimise disruption to all staff and any remaining displaced employees from Run 2 would be moved to other commercial runs, operating morning runs.

[41] On 23 May 2013, a meeting was held with TWU officials and site delegates where the matter of potential redundancies was discussed. At this meeting Mr Danalis raised the family commitments of the Applicants in respect of morning shifts.

[42] On 28 May 2013, a further meeting was held with TWU officials and site delegates, which the Applicants also attended. Mr Sommerville states that he advised the Applicants that the purpose of the meeting was to discuss the changes to Run 2 and to give them the opportunity to raise with him directly any issues the Applicants wished Chubb to take into consideration before making a decision.

[43] At this meeting, Mr Akcan handed Mr Sommerville his letter (discussed above) which outlined his inability to immediately cease afternoon shifts and work early morning shifts.

[44] Mr Haynes also expressed his inability to work morning shifts.

[45] Mr Sommerville states that he advised all present at this meeting including the Applicants that:

“three AVOs are going to have to go. ... Everyone wants the 11.30 shift but that means the three people on that shift would lose their jobs” 4

[46] Mr Sommerville was adamant that the Applicants knew they may be made redundant. Mr Sommerville told Mr Haynes directly that if he could not work morning shifts Chubb would have no choice but to make him redundant. 5

[47] On the following day, 29 May 2013, he advised Mr Akcan in the presence of the TWU site delegate that his position was made redundant, as Mr Haynes had reported sick following the meeting the day before, his letter of termination due to redundancy was couriered to his home address. Mr Sommerville’s evidence was that this decision was taken on the basis that the Applicants’ position had been made redundant and that they had both indicated that they were not immediately available to be considered for morning shifts.

[48] The evidence of Mr Lee, confirmed that at the meeting of 28 May 2013, both Applicants were advised of the impending need for redundancies and provided with the opportunity to raise any issues they had. Both Applicants indicated they were not available for the morning shift due to their various commitments. Mr Lee’s written notes of the meeting contain the following relevant notations 6:

Senol - handed letter to Owen

Would like to remain on the afternoon - run 3

Those times fit my lifestyle for me. My wife works part time .... Varies 3 hours to 4 hours in the morning.

Daniel - care for 2 young children in the morning

Wife is working full time

Preference is 2pm

4 pm is not suitable

Owen- This meeting is so you can come and put your position to me

3 AVO’s will be displaced

We will speak to PR. HR Director

[49] As Mr Haynes was absent on 29 May 2013, Mr Lee telephoned him on the 30 May 2013, regarding his redundancy. Mr Lee stated that Mr Haynes did not express any surprise at being made redundant or indicate that he was prepared to work on the morning shift. 7 Mr Haynes only concern was in respect of what would happen with his scholarship.

Conclusion

[50] Chubb’s jurisdictional defence of a genuine redundancy as defined in s.389 of the Act rests on Chubb meeting all three of the following tests:

● the Applicants’ jobs are no longer required to be performed by anyone;

● complying with any obligation under the Enterprise Agreement to consult about the redundancies; and

● it was not reasonable to redeploy the Applicants.

Whether position redundant

[51] In this matter it was not argued on behalf of the Applicants that three AVO positions had not become redundant. The Applicants’ jobs were no longer required to be performed by anyone, via the abolition of Run 2 at the Lane Cove depot.

Consultation

[52] The Applicants have focused their arguments on Chubb not complying with its obligations under the Agreement to discuss with the Applicants and put into writing details of the restructure, the effect the change was likely to have on the Applicants and measures Chubb is taking to avert or mitigate the adverse effect of the change on the Applicants.

[53] Chubb relies on a combination of factors in demonstrating that their Agreement obligations were met including discussions with the TWU. Consultation with the TWU regarding organisational change and potential redundancies during 2012 and 2013, although required under the Agreement, cannot alleviate the Agreement obligation to discuss and write directly to the affected employees.

[54] Mr Sommerville explained the temporary reinstatement of Run 2 was an acknowledgement that Chubb had not followed its Agreement obligations to the letter of the law. As a result, written advice was sent to the Applicants on 20 May 2013, following which, a meeting was convened on 28 May 2013, where the Applicants together with their union representatives were given the opportunity to raise any issues to mitigate the adverse affects of the restructure.

[55] Despite this, both Applicants gave evidence that it was not until they received their redundancy letters that they became aware of the possibility they could be made redundant. What appeared to be clear in the minds of Chubb management, was not on the evidence of the Applicants’ obvious to them. This communication defect may have arisen from Chubb speaking separately to the TWU on a number of occasions and particularly on 23 May 2013, without the Applicants being present. However, this does not necessarily result in the provisions of the Agreement not being met.

[56] Mr Sommerville conceded in cross examination that while the letter to the Applicants of 20 May 2013, advised of the changes as a result of the restructure, the correspondence did not mention potential redundancies. This was explained as an oversight, but also on the basis that no decision to initiate redundancies had been taken and as the correspondence stated, it was intended that all “displaced” AVOs would be moved to morning runs. On this basis, at the tool box meeting of 18 April 2013 the abolition of Run 2 was canvassed, however, the making of positions redundant had not yet been finally determined by Chubb.

[57] What appears in stark contrast to the evidence of the Applicants is the email of their colleague Mr Gardner who also worked Run 2 which refers to the issue of potential redundancies and the concerns of his colleagues, namely the Applicants. The Applicants both denied discussing potential redundancies with Mr Gardner, and Mr Gardner was not called by Chubb to give evidence by either party, as such, little weight can be attributed to whether he was also writing on behalf of the Applicants, but it was clear in Mr Gardner’s mind redundancies were a real option generating the reason for his email.

[58] At the meeting held of 23 May 2013, which was attended by TWU Organiser Mr Danalis, site delegate Mr Ahmed and Chubb management, the loss of three AVO positions was discussed. Mr Danalis gave evidence that (at this meeting):

“I also raised concerns over three workers being displaced from run three as a consequence of it being merged with run two. I mentioned that three employees had family responsibilities that they wished to discuss with the Company.” 8

[59] Following this meeting Mr Ahmed who was also in attendance then assisted Mr Akcan to draft a letter to Mr Sommerville on 26 May 2013, explaining his family circumstances in preparation for his meeting on 28 May 2013 with Chubb.

[60] Both Mr Sommerville and Mr Irvine who attended the 23 May 2013, meeting gave evidence that the issue of redundancies was raised. While Mr Ahmed was not called to give evidence in this case, it must follow that that the reason he assisted Mr Akcan to write to Mr Sommerville was they both knew of the need for redundancies/displacements as a result of the restructure.

[61] The meeting of 28 May 2013, was one where the Applicants were told of the need for redundancies. Mr Sommerville advised that three AVO positions had to go. As his witness statement reads:

“We are cutting a run and three AVOs are going to have to go. Whatever decision I make, three AVOs are going to be impacted and three AVOs are going to lose their jobs.” 9

[62] Mr Lee’s contemporaneous notes of the meeting confirm that this is what was put to the Applicants. Mr Sommerville then advised that the meeting was to enable the Applicants to state their positions, upon which each indicated they were unable to be considered for work on the morning shift, at least at that point in time, due to their personal circumstances. Mr Haynes raised questions about the 1600 turret shift and was advised by Chubb that this position could not continue. 10

[63] In my view, a bona fide opportunity was provided to the Applicants to influence Chubb’s decision making process on 28 May 2013. Mr Sommerville’s evidence was that he advised the Applicants that if they could not work morning shifts they would be made redundant. 11 Chubb considered what was put on behalf of the Applicants and made a decision, while unfavourable to the Applicants’ interests, it did not diminish the fact that the discussion process required to be undertaken had occurred.

[64] In considering whether the Agreement provisions have been complied with it is not to the point whether the consultative process adopted by Chubb could have been better, mere compliance is all that is required.

Redeployment

[65] The Applicants argue that it was reasonable that they be redeployed. Chubb submitted that there was no ability to absorb the redundant positions into its general workforce, three permanent AVO positions were surplus to requirements, and their fate was sealed through the Applicants’ unwillingness/inability to transfer to a morning shift forthwith. Had the Applicants made themselves available for the morning shift when given the opportunity, the redundancy process may have taken a different course, albeit three AVOs would still have been made redundant.

[66] The evidence indicated that since the Applicants’ redundancies, further redundancies at Chubb’s operations have occurred. Mr Sommerville’s evidence was that an additional four redundancies have occurred at the Lane Cove branch including the forced redundancy of an AVO. A further two AVOs are to be made redundant in the immediate future and two additional AVO redundancies in morning shift positions will occur within two months. There have also been five forced redundancies in the Lane Cove cash/coin room. Chubb’s Newcastle and Smithfield branches have also suffered a reduction in AVOs due to redundancies. 12 The cumulative effect of this being, there are no AVO vacancies in NSW/ACT only further impending redundant AVO positions. I do not find that it was reasonable for the Applicants to be redeployed by Chubb. 

[67] Based on my conclusions, I am not required to consider the applications under s.387 as the terminations are genuine redundancies pursuant to s.389 of the Act and thus the termination is excluded from the s.385 definition of unfairly dismissed.

[68] Had I not determined that Chubb had met its obligations in respect of consultation under the Agreement it would not have followed that the terminations were unfair. As Vice President Watson stated in Mr Jamil Maswan v Escada Textilvertrieb T/A ESCADA 13at 39:

In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But as it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred.

[69] In this case the decision was open to Chubb to make. To that end, fuller consultation would not have negated the operational reasons for the dismissal or have led to any other outcome based on the Applicants’ personal circumstances.

[70] Accordingly the Applicants’ claims of unfair dismissal must be dismissed.

COMMISSIONER

Appearances:

Mr A Guy on behalf of the Applicants.

Mr N Stevens on behalf of the Respondent.

Hearing details:

2013.

Sydney:

November 4 and 5.

 1   The Heathcote branch closed in August 2012

 2   AE893764

 3   [2012] FWAFB 5241

 4   Mr Sommerville Witness Statement Exhibit R1 at 42

 5   Ibid

 6   Mr Lee Witness Statement 30 August 2013 Exhibit R3 Attachment I

 7   Mr Lee Witness Statement 23 September 2013 Exhibit R4 at 20

 8   Mr Danalis Witness Statement 26 August Exhibit A3 at 15

 9   Mr Sommerville Witness Statement 30 August Exhibit R1 at 42

 10   Mr Sommerville Witness Statement 23 September Exhibit R2 at 19

 11   Mr Sommerville Witness Statement 30 August Exhibit R1 at 42

 12   Mr Sommerville Witness Statement 30 September 2013 Exhibit R2 at 4

 13   [2011] FWA 4239

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