Derek Worgan v Bedford Group Limited

[2014] FWC 8356

[2014] FWC 8356

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Derek Worgan
v
Bedford Group Limited
(U2014/10987)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 24 NOVEMBER 2014

Application for relief from unfair dismissal - genuine redundancy - transfer of employment opportunity refused.

[1] On 18 July 2014 Mr Worgan lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) with respect to the termination of his employment with Bedford Group Limited (Bedford). The application was not resolved through the conciliation process and was referred to me for determination.

[2] The application was the subject of a hearing in Adelaide on 13 November 2014. Mr Worgan represented himself and Bedford was represented by Mr Short, of counsel. A grant of permission to this effect was made at a telephone hearing for that purpose on 11 September 2014. Having heard the parties I was satisfied that the issue was sufficiently complex such that the matter would be more effectively determined through the involvement of a legal practitioner. Permission was granted pursuant to s.596(2)(a). In granting this permission, I advised Mr Worgan that he was able to seek a delay in the proceedings at any time so as to obtain legal advice.

[3] The proceedings on 13 November 2014 enabled the parties to provide evidence and submissions relative to the Bedford objection to the application on the basis that the termination of Mr Worgan's employment was a case of genuine redundancy consistent with s 389 of the FW Act. It also enabled presentation of evidence and submissions on the merits of the application.

The background to the application

[4] There is some conjecture over the commencement date of Mr Worgan's employment. He became a Bedford employee as a consequence of a transfer of business. I have accepted Mr Worgan's advice that the commencement date of his employment with that earlier entity was February 2001.

[5] Bedford is an employment services provider for people with disabilities. It is a direct employer but has also provided job placement services under contracts with both Job Services Australia (JSA) and Disability Employment Services (DES). As a Bedford employee, Mr Worgan worked in the Bedford Career Systems area. His role was to facilitate employment opportunities. In the second half of 2013 Bedford determined that it would no longer operate a Career Services function and engaged in discussions with Maxima which is a not for profit recruitment, training and employment organisation. Whilst final arrangements between Bedford and Maxima were being determined, certain Bedford Career Services operating employees, including Mr Worgan, were seconded to Maxima from February and March 2014. While these arrangements were being finalised Bedford lost two area specific employment placement contracts. The staff secondments were on the same employment terms that previously applied. In Mr Worgan's case, he remained employed at the Mount Barker office where he was working under the DES contract.

[6] Commencing in March 2014 Maxima had discussions with Mr Worgan (and other Bedford employees) about his working arrangements. Unlike Bedford, Maxima allocated particular responsibilities to employees as either Business Development operatives, who dealt with employers, or Employment Consultants, who dealt with job seekers. Mr Worgan accepted an allocation as an Employment Consultant. On his return from leave in June 2014, Maxima made Mr Worgan a formal employment offer, on the same employment terms and with recognition of his previous service but based at the Maxima Torrensville office. There is a dispute over whether Mr Worgan accepted that offer but, irrespective of this, on the following day he advised that he did not want to take on that role. He suggested that he was open to receiving a redundancy offer. Mr Worgan then contacted Bedford to discuss his employment opportunities.

[7] Mr Worgan had ongoing discussions with the Maxima General Manager and Bedford management. The matters raised by Mr Worgan included his concerns about office accommodation issues and his preference for working with people with disabilities rather than working under the JSA contract. These discussions and communications did not resolve his concerns and he confirmed that he would not accept the Maxima employment offer. In correspondence of 30 June 2014 Bedford advised Mr Worgan that his employment was terminated with effect from that date. Bedford paid Mr Worgan 5 weeks pay in lieu of notice. Redundancy payments were not made to Mr Worgan.

The Submissions

[8] Mr Worgan asserts that the termination of his employment did not reflect the necessary consultation requirements to be regarded as a genuine redundancy for the purposes of s.389 of the FW Act. Further, he asserts that the role offered to him at Torrensville was quite different to his previous function at Bedford. In terms of the merits of his application, he asserts that the termination of his employment was unfair in that he was not paid redundancy payments.

[9] The Bedford position is that it met all of the requirements for a genuine redundancy which are specified in s.389 of the FW Act. It asserts that no redundancy payments were due to Mr Worgan as a consequence of the redeployment opportunity offered to him. Accordingly Bedford asserts that the termination of Mr Worgan's employment cannot be regarded as unfair.

[10] In the alternative, Bedford asserts that it had a valid reason for terminating Mr Worgan's employment and that this termination occurred following a fair and reasonable process.

The Evidence

[11] Whilst I have taken all of the evidence before me into account in considering this matter, I have briefly summarised this in the following terms.

[12] Mr Worgan's evidence went to the work he undertook for Bedford directly and as a employee seconded to Maxima. His evidence went to the process followed to implement the secondment and his understanding of the offer and the manner of offer of employment with Maxima. He explained his reasons for declining the ongoing employment offer with Maxima.

[13] I have noted an unsworn statement from a Ms Gale who has worked with Mr Worgan as an employment consultant. In that statement, Ms Gale set out the process followed to effect employment transfers to Maxima and her understanding of the arrangements that applied to Mr Worgan.

[14] In another unsworn statement, a Ms Thompson, who also worked with Mr Worgan, detailed her employment experience with Bedford, including her redundancy when Bedford lost a particular JSA contract.

[15] Ms Griffen is the Bedford General Manager People and Culture. Her evidence went to the nature of Bedford’s operations and the operational changes made to the Career Systems element of the business. Ms Griffen's evidence went to the arrangements with Maxima for employment transfers, including that of Mr Worgan. She detailed Bedford's employment records relevant to Mr Worgan and her communications with him during the intended transfer process. She also detailed the steps finally taken to terminate Mr Worgan's employment after he declined the offer of ongoing employment with Maxima.

[16] Mr Hardy is the General Manager of Maxima. His evidence confirmed the arrangements for Maxima to take over the employment of the Bedford Career Systems employees, including Mr Worgan. Mr Hardy's evidence went to the similar nature of the work under both the JSA and DES contracts and to the steps taken by Maxima to offer ongoing employment to Mr Worgan.

Findings

[17] Section 389 defines a genuine redundancy in the following terms:

“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.”

[18] Section 385 establishes that, if the termination of Mr Worgan's employment was a genuine redundancy, it cannot be unfair.

[19] Before considering the specific requirements of s.389, I have made a number of findings on the evidence before me.

[20] I have concluded that the position offered to Mr Worgan by Maxima involved the application of comparable skills and functions and was at a location which made travel to it reasonable and acceptable. Mr Worgan had travelled to comparable locations in the past as a Bedford employee and he was provided with a maintained vehicle. The employment conditions offered to Mr Worgan by Maxima were at least equal to those that applied to him as a Bedford employee and may have exceeded that level.

[21] The evidence before me supports the conclusion that Mr Worgan accepted his classification as an Employment Consultant. He generally described himself as such in correspondence and did not argue to Maxima or to me, that the allocation of those particular duties was inappropriate. I have concluded that Mr Worgan initially accepted the position of Employment Consultant for Maxima at Torrensville on 2 June 2014, but subsequently changed his mind and refused that position. In this respect, I prefer the evidence of Mr Hardy to that of Mr Worgan. Additionally, the email sent by Mr Worgan to Mr Hardy on 3 June 2014 confirms this. That email 1 was in the following terms:

“Well a lot can certainly change in 12hrs. I needed to take my partner, Peter to Casualty at the RAH last night at 3am this morning for a collapsed disk in his neck and he has an appointment for a Neurosurgeon this afternoon. In this time have had time to think about how this health issue will impact on our home lives. I have had a rethink of your offer yesterday and feel I just do not have the energy at this time to take on learning a new program and essentially a new job, also the extra time in travel that will be required, but I do appreciate your offer.

May I suggest f you are looking at reducing staffing levels here in Mt Barker, would it be possible to put my hand up for a package, whilst we are still connected to Bedford? I would be willing to consider this as an option.

I am truly sorry to give you the run around.” (sic)

[22] The evidence confirms that Mr Worgan had previously, as a Bedford employee, worked under both JSA and DES contracts. Mr Worgan's email of 12 June 2013 2 to an associate relevantly states:

“Well I’m certainly over it here. I applied for the DES BD role, then I’m BD for both DES and JSA and now have been moved into JSA totally. I did have a little melt down last week (and had the week off) due to all the pressure and having no friggen idea on what it is I’m suppost to be doing in JSA. But is I can hang in there for another 4 weeks we are outta this country for 3 months. Did you hear 3 months, that’s 85 days, that like 2,040 hrs away from this place, yahhhh!!!!!” (sic)

[23] Irrespective of this, I have accepted the evidence of Mr Hardy to the effect that the roles are essentially the same although they obviously involve different clientele. In reaching this conclusion I acknowledge Mr Worgan’s preference for working with clients covered by the DES contracts, but a work preference is clearly distinguishable from a work capacity.

[24] I have concluded that whilst Mr Worgan identified a number of different reasons for declining the Maxima offer of ongoing employment, his primary reasons for doing so were that he preferred to work with people with disabilities and that he sought a redundancy payment. Mr Worgan's evidence was to the effect that he preferred the DES clients and his advice to Ms Griffen was consistent with this. His communications to Mr Hardy also confirmed his interest in receiving a redundancy payment.

[25] Clause 46 of the Bedford Group Enterprise Agreement 2013 states:

“46. TRANSFER OF BUSINESS

46.1 If Bedford transfers all or part of its business to another employer, employees will not be entitled to redundancy pay if:

(a) they accept an offer of employment from the new employer and the new employer agrees to count the employee’s service with Bedford as service with the new employer; or

(b) they reject an offer of employment from the new employer; and

(i) the offer was for terms and conditions of employment that are substantially similar and no less favourable overall than the employee’s terms and conditions of employment at Bedford; and

(ii) the new employer agrees to count the employee’s service with Bedford as service with the new employer.

46.2 In this part of the Agreement, transfer of business has the same meaning as it has in the National Employment Standards under the Fair Work Act 2009 (Cth).”

[26] I have concluded that, for the purposes of this clause, the arrangement implemented with respect to Mr Worgan, constituted a transfer of business such that as Mr Worgan rejected that employment offer, Bedford was not obligated to make redundancy payments to him.

[27] In terms of s.389(1)(a) Bedford's decision to cease job placement activities and transfer that function to Maxima represents a change in its operational requirements which explains why Mr Worgan could no longer be offered employment as a Bedford employee. Consequently, the requirements of this subsection have been met.

[28] In terms of s.389(1)(b) I am satisfied that Bedford complied with the necessary obligations to consult about the operational changes. Bedford provided its Career Systems employees with extensive advice about the proposed changes and its relationship with Maxima. Mr Worgan acknowledged his receipt of written advice of these arrangements and he was also involved in the various briefings about these changes. I have concluded that Mr Worgan was clearly aware that Maxima were seeking to identify suitable employment for him. The fact that an ongoing employment offer was formally put to him immediately after his return from leave does not detract from the fact that Bedford met its obligations to consult about the changed business structure. Further, even after Mr Worgan declined the Maxima employment offer, Bedford engaged in ongoing discussions with him. I am satisfied that the necessary consultation obligations were met.

[29] In terms of the obligation to redeploy Mr Worgan, if this was reasonable, I note that Mr Worgan does not dispute that this was not feasible in his circumstances. Notwithstanding this, it is patently clear that there were no redeployment opportunities as Bedford was no longer operating that type of business.

[30] Consequently, I am satisfied that each of the requirements of s.389 have been met. Accordingly, and consistent with s.385 the termination of Mr Worgan's employment cannot be unfair and the application must be dismissed accordingly. An Oder (PR558083) to this effect will be issued.

Appearances:

D Worgan on his own behalf.

A Short counsel for the Respondent.

Hearing details:

2014.

Adelaide:

November 13.

 1   Exhibit R3, attachment 1

 2   Exhibit A6, second para

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