Denise Faasegi Herbert v American Express Australia Limited

[2016] FWC 1398

[2016] FWC 1398

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Denise Faasegi Herbert
v
American Express Australia Limited
(U2015/13042)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 7 MARCH 2016

Application for relief from unfair dismissal.

Introduction

[1] On 21 September 2015 Ms Denise Faasegi Herbert (the Applicant) lodged an application, pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal against American Express Australia Limited (the Respondent).

[2] The Applicant says that she commenced employment with the Respondent around 1 March 2012, having been engaged as a contractor for about a year prior to that.

[3] The Applicant was notified of the dismissal on or about 29 July 2015 and it took effect on 2 September 2015.

[4] The Applicant seeks reinstatement and compensation because the selection process used by the Respondent to restructure its enterprise and implement the redundancy of the Applicant was unfair.

[5] The Applicant received seven weeks’ redundancy pay in accordance with the Respondent’s redundancy pay policy.

[6] The Respondent states that the Applicant received a salary of $51,631 per annum pursuant to the Banking, Finance and Insurance Award 2010 [MA000019]. It says that it complied with its consultation obligations pursuant to this award and that the dismissal was not unfair because it was a genuine redundancy.

[7] The Applicant was a “Past Due Specialist” in the Respondent’s Global Credit and Administration (GCA) Department based in Sydney.

[8] In July 2015 the Respondent commenced a consultation process with the 28 employees in the team about a proposed restructure arising from the transfer of some work to India. Some nine positions were to be abolished. A letter was sent to all employees outlining the process to be adopted. The Applicant had been on extended leave since 5 August 2014.

[9] The Applicant nominated her husband Mr Stephen Herbert as her contact point and email contact was made with him. A number of communications were sent during July 2015.

[10] The Respondent used a “Desktop Selection Process” to determine which employees would be selected for redundancy and which would remain in their roles. This involved a ranking system based on performance against some key indicators.

[11] Letters advising of the redundancy and providing five weeks’ notice were sent to the 9 employees, including the Applicant, on 29 July 2015.

[12] The Respondent submitted that redeployment was not possible, especially as there was a broader restructure of the whole GCA department at the same time that involved more redundancies.

Commission Proceedings

[13] The conciliation scheduled for 26 October 2015 was cancelled at the request of the Applicant.

[14] A telephone hearing took place before Deputy President Gooley on 18 November 2015 with respect to the Applicant’s proposed order to produce. In a decision issued on that day, [2015] FWC 7948, Deputy President Gooley approved restricted orders to produce certain records of the Respondent dealing with the Applicant’s performance record. This material, which consisted of the rankings for affected employees, including the Applicant, was produced on 23 November 2015. Amended directions for the filing of submissions and witness statements were also issued. A confidentiality order was also issued with respect to the names and details of current employees.

[15] I conducted a programming conference by telephone on 1 December 2015.

[16] The hearing took place in Sydney on 8 December 2015.

[17] The Applicant was represented by Mr S. Herbert. She did not appear on the grounds of ill-health as advised by Mr Herbert. The Respondent was represented by Mr S. Meehan of Counsel with Mr T. Woodland of Minter Ellison. Mr Meehan and Mr Woodland were granted permission to appear pursuant to s.596 of the Act.

[18] At the 1 December mention Mr Herbert submitted nine orders requiring a person to attend the hearing. Three of these had already filed witness statements, two were not pressed and declined to grant the remaining four on the grounds of relevance.

[19] The Applicant relied on a written submission and two affidavits. As I have mentioned, she did not appear and therefore could not be cross-examined.

[20] The Respondent relied on written submissions on jurisdiction and the merits and the witness statements and oral evidence of:

● Sorine Martinolli – Vice President of Credit Operations Asia Pacific, American Express – Exhibit M1

● Anshu Kohli – Employee Relations Specialist, American Express – Exhibit M2

● Courtnay Lanagan – Employee Relations Specialist, American Express – Exhibit M3

Protection from Unfair Dismissal

[21] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[22] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(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.

Note: High income threshold indexed to $136,700 from 1 July 2015

[23] There was no dispute that the Applicant had the required service, the relevant award applied and the Applicant’s income was below the high income threshold.

[24] The Applicant was therefore protected from unfair dismissal.

Was the dismissal unfair?

[25] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

385 What is an unfair dismissal

A person has been unfairly dismissed if the 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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

Was the Applicant dismissed?

[26] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for the purposes of Part 3-2 of the Act. Section 386 of the Act provides that:

386 Meaning of dismissed

(1) A person has been dismissed if:

(a) The person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) The person has resigned from his or her employment, but was forced to do because of conduct, or a course of conduct, engaged in by his or her employer.

[27] There was no dispute that the Applicant was dismissed. She submits that the dismissal was “not a case of genuine redundancy” and therefore was unfair.

[28] Section 396 of the Act provides that the Commission must decide whether the dismissal was a case of genuine redundancy before considering the merits of the application.

[29] “Genuine redundancy” is defined in s.389 of the Act 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.

(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.

[30] An employer will not be able to rely on the defence of “genuine redundancy” to an unfair dismissal application if it would have been reasonable, in all the circumstances, for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity.

The Applicant’s Case

[31] The Applicant’s main role as a “Customer Care Professional” was to accept inbound and outbound calls in order to collect overdue payments from customers. She submits that given her experience and skill levels, she should have been able to be re-deployed to other aspects of the Respondent’s operation.

[32] At the time of the dismissal, the Applicant was not at work. She had suffered a stroke in early August 2014.

[33] The Applicant submits that it was not a case of genuine redundancy because other employees “were allocated to the same position or re-employed/re-deployed to other sections”. She denies that the respondent no longer required the work of the nine positions to be performed by anyone.

[34] The Applicant submits that the Respondent’s ranking system was not fair to the Applicant.

The Respondent’s Case

[35] The Respondent submits that the Applicant’s dismissal was a genuine redundancy within the terms of s.389 because the Respondent no longer required her job to be performed by anyone. As part of a global drive for efficiency, the work was outsourced to India. The Respondent therefore only needed 19 employees in the Past Due Team in Sydney, not 28.

[36] The Respondent submits that it fully complied with its consultation obligations under the Award. It sought to have discussions with the Applicant and Mr Herbert on a number of occasions during July 2015. Email and letter communications were sent on 14, 24 and 27 July 2015. The Applicant was advised by the Respondent on 27 July that it would select employees through a “desktop selection process”. No comment or feedback was received by the Applicant or Mr Herbert.

[37] The Respondent submits that no redeployment opportunities existed within its business that were suitable for the Applicant’s skills and experience.

[38] The Respondent submits that the selection criteria and their application were fair to all employees including the Applicant. The Applicant was part of a pool of employees who all performed the same job and were treated in the same way. The Applicant’s score was eight from the bottom of the 28 relevant employees

[39] The Respondent submits that the dismissal was not otherwise harsh, unjust or unreasonable pursuant to s.387.

Was the Dismissal a Genuine Redundancy within s.389(1)?

[40] The Respondent must show that it no longer required the Applicant’s job to be performed by anyone because of changes in the operational requirements of its enterprise and that it complied with the consultation obligations in a modern award or enterprise agreement if they apply.

[41] As the Applicant was employed under a modern award, the Respondent must comply with the consultation requirement.

[42] The test is whether the previous job had survived a restructure or downsizing, rather than a question as to whether the duties have survived in some form: Kekeris v A. Hartrodt Australia Pty Ltd ([2010] FWA 674). A “job” being “a collection of functions, duties and responsibilities, as part of the scheme of the employees’ organisation, to a particular employee” Jones v Department of Energy and Minerals ([1995] QIR 204). The onus is on the employer to prove, on the balance of probabilities that the redundancy was due to changes in operational requirements: Kieselbach v Amity Group Pty Ltd (Hamilton DP, 9 October 2006 PR973864)

[43] Sorine Martinolli gave evidence about the Respondent’s Global Credit Administration. It had some 86 employees at the time of her evidence. The Past Due Team, as part of GCA, pursues debts on cards which are past their due date. She detailed the process of outsourcing the work of the team to its entity in India. This was done because of the lower wage structure in India and decline in volume in Australia. The only staff of the Past Due Team left in Australia was to handle David Jones cards, because of a contractual obligation. Assessment of the remaining work meant that nine positions would be eliminated.

[44] This was part of a broader restructure of GCA which led to 46 employees being made redundant. All of these employees were selected through the same desktop selection process. This was a comparison assessment of staff ranking employees in competency and past performance.

[45] In the circumstances, I accept that this was a restructure by a multi-national business designed to reduce costs. The result of the restructure was that the Applicant no longer had any function or duty to perform and therefore her position was redundant.

[46] Attached to the Respondent’s written submission was a statement of Ms Katica Cindric, a Manager in GCA who was responsible for implementing the desktop selection process. It explained in great detail how the process worked. It was not the subject of specific criticism by Mr Herbert. Accordingly, I am satisfied that the Respondent, having decided that it would outsource the work and that nine positions would be abolished, was entitled to use this selection process. Nothing was put that demonstrates that it was unfair or inappropriate.

[47] Anshu Kohli’s statement details the consultation process undertaken by the Respondent. The Applicant was absent with a medical certificate which declared her unfit to work with no return date. The steps taken are summarised at paragraph 36 above. The Applicant and Mr Herbert were generally non-responsive to the various attempts made at consultation. I am satisfied that the Respondent has complied with its consultation obligations pursuant to the Award.

[48] I find therefore, that the Applicant’s job with the Respondent was redundant. Accordingly, I find that the requirements of s.389(1) are satisfied.

Redeployment

[49] The approach of the Commission with respect to redeployment is contained in recent Full Bench decisions such as:

● Ulan Coal Mines Limited v Honeysett and others[2010] FWAFB 7578

● Technical and Further Education Commission t/a TAFE NSW v L. Pykett[2014] FWCFB 714

● Teterin v Resource Pacific Pty Limited T/A Ravensworth Underground Mine [2014] FWFB 4125

● Ventyx Pty Ltd v Mr Paul Murray[2014] FWCFB 2143

[50] I have dealt with the issues in recent decisions:

● Teterin v Resource Pacific Pty Limited T/A Ravensworth Underground Mine [2014] FWC 1578

● Vukoja v Toyota Motor Corporation Australia Limited[2014] FWC 3764

● King v Catholic Education Office Diocese of Parramatta T/A Catholic Education Diocese of Parramatta[2014] FWC 6413

[51] The Applicant must establish that it was reasonable for her to be redeployed within s.389(2) for her dismissal to be decided to be not a genuine redundancy. If this is so, the "defence" of "genuine redundancy" available to the Respondent under s.385 will not apply. A decision will then need to be made as to whether the dismissal was otherwise harsh, unjust or unreasonable. An examination of both the actions of the employer and the employee is required. As to what is considered reasonable will turn on the circumstances of each case

[52] I find that it would not have been reasonable, in the circumstances of this case, for the Applicant to be redeployed, for the following reasons:

* The restructure of the Past Due Team was part of a broad restructure within the Applicant’s international and Australian operations which meant that other positions were not available.

* I accept the evidence of Sorine Martinolli, Anshu Kohli, and Courtnay Lanagan that they had attempted to find other positions to which redeployment could have been considered.

* I find redeployment did not occur in respect of any of the nine employees made redundant in the team.

* There is no evidence of the Applicant seeking other positions or expressing any interest in redeployment.

Conclusion

[53] I find that the dismissal of the Applicant by the Respondent was a genuine redundancy pursuant to s.389.

[54] It follows that the Applicant’s claim for a remedy for unfair dismissal must fail and is therefore dismissed. An Order (PR577760) in these terms will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

S. Herbert for the Applicant;

S. Meehan of counsel with T. Woodland, solicitor for the Respondent.

Hearing details:

2015

December 1 (telephone-conference) 8.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR577635>