[2015] FWC 2601 [Note: An appeal pursuant to s.604 (C2015/3808) was lodged against this decision - refer to Full Bench decision dated 21 July 2015 [[2015] FWCFB 4029] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Dominic Fitzjohn
v
Southern Cross Protection Pty Ltd
(U2014/12178)

DEPUTY PRESIDENT SAMS

SYDNEY, 15 APRIL 2015

Termination of employment - application for an unfair dismissal remedy - national company restructuring - whether dismissal a case of genuine redundancy - consultation - offers of reasonable redeployment declined - outsourcing of work is a genuine redundancy - redeployment options reasonable - case of genuine redundancy - no jurisdiction - application dismissed.

INTRODUCTION

[1] Mr Dominic Fitzjohn (the ‘applicant) was employed by Southern Cross Protection Pty Ltd (the ‘respondent’ or ‘Southern Cross) as a mobile Security Patrol Officer, based in the Northern metropolitan region of Brisbane. The applicant was initially employed in this role by Chubb Security Services Ltd and then by Southern Cross approximately six years ago.

[2] The background to this matter may be shortly stated. In July 2014, the respondent began a process of restructuring a number of its less profitable patrol runs, including by outsourcing the work to contractors. After the expiry of a consultation period, the respondent notified the applicant of his redundancy on 14 August 2014, to take effect five weeks later. However, on 25 August 2014, he was notified that he would not be required to work the remainder of his notice.

[3] On 2 September 2014, the applicant filed an application, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’) seeking a remedy from what he claimed was his unfair dismissal by the respondent. The applicant rejected the proposition that his termination was a case of genuine redundancy. He relied on the definitions of unfair dismissal and genuine redundancy found at ss 385 and 389 of the Act respectively as follows:

‘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

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

...

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.’

[4] For present purposes, s 396 of the Act relevantly states:

‘396 Initial matters to be considered before merits

The FWC 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;

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

[5] It is to be observed that there is often an overlap with the merits of an unfair dismissal application and consideration of whether a termination of employment is a genuine redundancy. So it was in this case, with the applicant arguing; firstly, that there were no genuine operational requirements for his job to be made redundant; secondly, that his job still existed and was being performed by another person; and thirdly, that the respondent had failed to comply with its obligation to consult with him, pursuant to cl 8 of the Security Services Industry Award 2010 [MA000016]. That clause is as follows:

‘8. Consultation

8.1 Consultation regarding major workplace change

(a) Employer to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b) Employer to discuss change

(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a) the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1(a).

(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

8.2 Consultation about changes to rosters or hours of work

(a) Where an employer proposes to change an employee’s regular roster or ordinary hours of work, the employer must consult with the employee or employees affected and their representatives, if any, about the proposed change.

(b) The employer must:

(i) provide to the employee or employees affected and their representatives, if any, information about the proposed change (for example, information about the nature of the change to the employee’s regular roster or ordinary hours of work and when that change is proposed to commence);

(ii) invite the employee or employees affected and their representatives, if any, to give their views about the impact of the proposed change (including any impact in relation to their family or caring responsibilities); and

(iii) give consideration to any views about the impact of the proposed change that are given by the employee or employees concerned and/or their representatives.

(c) The requirement to consult under this clause does not apply where an employee has irregular, sporadic or unpredictable working hours.

(d) These provisions are to be read in conjunction with other award provisions concerning the scheduling of work and notice requirements.

8.3 Consultation regarding change of contract

(a) In addition to clause 8—Consultation, where a decision is made by an employer to relinquish a security contract, or a decision is made by a principal that is likely to bring about a change of contract, the following will apply:

(i) The employer is required to notify employees 28 days, or as soon as practicable, before an existing security contract is due to expire, or when the employer has been notified that the contract has been terminated.

(ii) The notification to employees must be in writing, containing options (if any) for suitable alternative employment for employees with the employer in the event that the contract is terminated. The employer must notify those employees who are to be offered suitable alternative employment, identify the site, the hours of work and the rates of pay proposed. The employer must provide to the successful tenderer a list of employees who have given permission for their details to be so provided and who wish to be considered for employment by the incoming contractor.

(iii) Employees who are not offered suitable alternative employment with their employer must be notified in writing by their employer, and the notice must contain details of the employee’s entitlements (including accrued annual leave) and a statement of service (including length of service, hours of work, classification and shift configuration).

(iv) The employer must facilitate a meeting between the incoming contractor and outgoing employees who are not offered suitable alternative employment with the employer.’

[6] The application was listed for arbitration in Brisbane on 21 January 2015. At the outset of the hearing, attempts were made by another member of the Commission to conciliate a settlement of the matter. However, these efforts proved unsuccessful. The arbitration proceeded with the applicant representing himself and Mr S Gorval of Employsure Workplace Relations Specialists appearing for the respondent after I granted Mr Gorval’s application to represent the respondent as a paid agent, pursuant to s 596 of the Act. The applicant requested, if permission to be represented was granted, that he be permitted to file written reply submissions after the hearing. This was granted and the applicant enthusiastically responded to this further opportunity to supplement his case.

THE EVIDENCE

[7] In addition to the applicant, the following persons gave written and/or oral evidence in the proceedings:

Mr Vishal Arora, Director, Immediate Response Security Services (IRSS);

Mr David Medhurst, Chief Executive Officer, Southern Cross; and

Mr Jamie Thomson, Eagle Farm Branch Manager, Southern Cross.

For the respondent

Mr Vishal Arora

[8] Mr Arora attended the Commission to give evidence under summons. In oral evidence, he explained that his company, IRSS is a licensee to Southern Cross. He issues invoices to Southern Cross. Neither he, nor IRSS are related entities of Southern Cross.

[9] In answer to a question from me, Mr Arora explained that IRSS engages approximately ten employees. Four of these employees perform work in relation to the contract with Southern Cross and the others are engaged, pursuant to contracts with other companies.

[10] In cross examination, the applicant attempted to put a number of questions to Mr Arora as to whether the employees of IRSS were performing the same work in the same manner as he had performed as an employee of Southern Cross. However, it was unnecessary for Mr Arora to answer these questions, as this point was conceded by the respondent. Mr Arora agreed that IRSS regularly performed work on weekend day shifts. Mr Arora acknowledged that IRSS had employed a Mr Baha Doha Singh for four years and that he was paid a salary.

Mr David Medhurst

[11] In written evidence, Mr Medhurst outlined the provision of security patrol services to Southern Cross clients throughout Australia and the nature of the applicant’s work. As a result of national roster and route restructuring, the applicant’s position ceased to exist and the applicant was entitled to redundancy. The applicant had been consulted and offered two redeployment options, both of which he rejected. After the unfair dismissal conciliation, he had been offered work on a permanent part time roster, casual mid-week night shifts and casual mid-week day shifts. He had rejected these shifts as well.

[12] Mr Medhurst set out the process of restructuring undertaken by the respondent. He explained that Southern Cross was seeking to reduce costs following the loss of a number of business contracts. A series of meetings were held with Branch Managers in June 2014 to determine the effectiveness of the current patrol arrangements. It had been determined that seven part time weekend routes operated at a loss, including the one worked by the applicant. These were restructured. As a result, the applicant’s position ceased to exist. The applicant was the only Security Patrol Officer made redundant, as all the other affected employees had taken up redeployment offers.

[13] Mr Medhurst stated that the restructuring meant that while the Eagle Farm weekend work was still performed at a loss, the changed arrangements meant that there was a saving to the respondent of $1,099 per month.

[14] Mr Medhurst said that the changes were implemented in New South Wales in June 2014, in Victoria in July 2014 and then in Western Australia and Queensland at the end of July 2014. Throughout this period, meetings were held with Branch Managers to monitor the progress of the restructure.

[15] Mr Medhurst deposed that prior to the restructure, the applicant had been employed on a fortnightly weekend day shift (46 hours per fortnight), for which he was paid $1,568.95 gross, including applicable loadings. The first redeployment option offered to him was a Security Patrol Officer on full time weekday shifts (76 hours per fortnight), for which he would be paid $2,153.65 gross, including applicable loadings. He was also offered part time week day shifts (46 hours per fortnight), for which he would have been paid $930.38 gross, including applicable loadings. The duties in both of these roles were the same as under the applicant’s original role and were to be performed in the same geographic location. However, the applicant had made it clear that he would not accept a role that was not a part time weekend day position.

[16] In cross examination, Mr Medhurst explained that the review of weekend runs had determined that the weekend runs returned the least revenue across the business. Engaging sub-contractors to reduce costs was introduced as a solution.

[17] Mr Medhurst was unable to say whether the contracts at risk of being lost impinged directly on run 40149 (performed by the applicant) or any other specific runs.

[18] Mr Medhurst said that the efficiencies introduced under the new arrangements included a ‘day task’ rate with independent contractors, revenue split arrangements with licensees, labour hire rates with licensees and labour-hire rates with contractors. However, he declined to give details of these commercially sensitive arrangements. He noted that the weekend arrangements still ran at a loss, but this loss had been significantly reduced.

[19] Mr Medhurst was asked questions as to the loadings he had applied in setting out the gross amounts payable under the redeployment options offered to the applicant. Some Saturday and Sunday loadings had been included, as the role may have involved rotating shifts.

[20] Mr Medhurst agreed that the roles offered to the applicant in Acacia Ridge and Eagle Farm would have meant displacing a contractor’s role. Nevertheless, the respondent had still been prepared to offer this role to the applicant as a redeployment option.

Mr Jamie Thomson

[21] In written evidence, Mr Thomson set out the nature of the respondent’s business and the restructuring process undertaken by the respondent (See Mr Medhurst’s evidence, para [11]-[12] above). He said that prior to the restructure, the applicant had been assigned to one of two of Southern Cross’ Brisbane North weekend day runs between 06:00 and 18:00. Under this structure, neither of the vehicles were able to finish the run within the given timeframe, due to the volume and distance between alarms. This meant that a third ‘floater’ vehicle would also be utilised for four to six hours. Extra alarm calls could result in the applicant being late back to the depot, meaning delays in the night runs.

[22] Mr Thomson explained that the operational changes were designed to address these issues, taking into account the financial loss of these runs. It was determined that the run previously assigned to the applicant would be better carried out by the licensee responsible for the second vehicle and ‘floater’ vehicle. Accordingly, the applicant’s role was ‘absorbed’ by the licensee. Mr Thomson said between July and August 2014, there had been an average of 51 calls per run each day and 109 missed calls over that period. After the restructure, there was an average of 33 calls per run and only one missed call. He observed that Southern Cross had lost another major contract since the filing of this application.

[23] Mr Thomson noted that previously the applicant had been required to cross a toll bridge, six to eight times per day, costing $4.25 each time, when working on his run to service a particular client. After this client was allocated to another branch crossing the bridge was no longer necessary.

[24] Mr Thomson stated that on 23 July 2014, he spoke with the applicant by telephone to advise of the nation-wide restructure of weekend part time positions. The applicant had become upset, sworn at him and hung up. He unsuccessfully tried to call the applicant again and then sent a letter to him in the following terms:

‘Re: Proposed Redundancy

I refer to our informal discussions and briefing on 23.07.14 regarding the above proposal. I write to confirm that this letter marks the beginning of a 14 day period of formal consultation with staff affected by the proposal. This period of consultation will end on 06.08.14.

I am writing to explain how the proposed change will affect you, and to invite you to submit any comments or questions you may have on the method of implementing the new structure, or on your own personal situation. I am conscious of how important it is to use the insight and suggestions of those directly involved in this area to inform and refine my plans and I would welcome therefore, any comments or suggestions you have. Your feedback can be given directly to me or Vicky Hopper, National HR Manager, if you prefer.

Background and rationale for the proposal
Southern Cross Protection Pty Ltd (the Company) is introducing a change to the roster schedule on a National basis, we are being forced to undertake rationalisation to contain costs due to recent and pending business losses.

ISS Work lost to Wilsons
CBA alarm response work lost to SNP

Summary of proposal
During the consultation period you will be notified of all alternative job positions within the Company.
1. Full time night patrol work
2. Part time day patrol work Mondays and Fridays
If you wish to apply for more than one post, you will be asked to express a preference in your application. You are of course, welcome to apply for any other available posts within the structure if you wish and you will be informed when these are being advertised.

Unfortunately, the effect of the proposal is that your current post as a part time weekend patrol officer will cease to exist and I must advise you that you are at risk of redundancy.

Individual Consultation Meeting
I appreciate that you may wish to discuss your options and the process, and therefore, I can arrange to meet with you for a confidential discussion on a date and time to be confirmed. If you wish you may be accompanied to the meeting by a representative of your choice.

I understand that this is a difficult period for you and would like to take this opportunity to remind you of the Employee Assistance Scheme, a confidential service offered to all our staff on [number supplied].’

[25] Mr Thomson spoke to the applicant again on 25 July 2014. The applicant apologised for hanging up on him and a conversation, in words to the effect of the following, took place:

The applicant:	I do not agree with the proposal and as we have a contract we cannot change it without both parties agreeing to the change.
Mr Thomson:	Southern Cross no longer agrees with the contract and we wish to negotiate a new contract. We are offering you alternative employment options, including redundancy if the redeployment options are not suitable to you.
The applicant:	Southern Cross is only doing this as a cost cutting measure to give the work to cheaper contractors.
Mr Thomson:	We are a business and we have margins to meet and we are allowed to look at cost savings measures.

[26] Mr Thomson said that the applicant maintained that the contract between the parties could not be changed, unless both parties agreed. Mr Thomson had noted that if the applicant’s view was correct, then he would not be able to resign, without the employer’s consent. The applicant reiterated that his interpretation was correct and that he would have to remain employed until a replacement was found. In any event, they agreed that the applicant would continue to attend his shifts while the consultation and redeployment process moved forward. The applicant insisted that all communications under this process be in writing.

[27] Mr Thomson had emailed the applicant on 28 July 2014 to arrange a consultation meeting to further discuss the restructuring process. It stated, in part:

‘The company needs to make a decision about this change in a timely manner. As such, we would like to give you until 06.08.2014 to make a decision about the alternate decisions made available. If you do not accept one of these positions or make another proposal by this date the company will have to make a decision about the change in your employment. That may include you [sic] position being made redundant.’

[28] In a further email dated 31 July 2014, in response to a query from the applicant, Mr Thomson had set out the details of the two redeployment options. Under the full time week night shift, the roster would be alternated between 11.5-12 hour shifts on Mondays, Tuesdays, Wednesdays and Thursdays in the first week and then Tuesdays, Wednesdays and Thursdays in the second. Under the part time week day roster, shifts would be on Monday-Friday between 4:00am and 4:00pm. For both rosters, the duties would be the same, in the same geographic location and the applicant’s seniority status would not be affected.

[29] Annexed to Mr Thomson’s statement were emails between himself and the applicant dated 6 August 2014. In these emails, he had advised the applicant that the consultation period had ended and that Southern Cross needed a decision as to whether he would accept either of the redeployment options. This was rejected in an email from the applicant the same day. A letter was attached to a further email to the applicant confirming the conclusion of the consultation period and inviting the applicant to a final redundancy meeting.

[30] Mr Thomson attended a final consultation meeting with the applicant on 11 August 2014. Also in attendance and taking notes was Mr Bryan Penny, an employee of Southern Cross. Mr Thomson again put the two redeployment options to the applicant and reiterated that they were put to him in order to avoid his redundancy. The meeting was brief as the applicant immediately declined both of these positions and said that he wanted to continue working on the weekend day shift. Mr Thomson sent a letter to the applicant after this meeting. It was in the following terms:

‘We refer to our meeting on 11th August 2014.

At this meeting the Company again provided an overview of the current position, summarised the matter to date and sought your further comments and proposals in relation to this matter.

The Company also confirmed that, having reviewed other areas within the business, there are currently no vacancies or opportunities within the business.

As a result of this redundancy, this letter marks the commencement of your 5 week notice period, your final working day will be Sunday 14th September 2014. You will be entitled to the following:
Accumulated statutory and contractual entitlements up to and including the last day of your employment.

We note that the company have referred the question of your redundancy pay onto the Fair Work Commission for determination. We have filed an application for the commission to make a decision as to the amount of redundancy pay that you are entitled given the fact that the company offered employment alternatives which you rejected. The figure which you will be entitled (if any) will be confirmed as soon as possible.

We sincerely thank you for your efforts to date and hope that you appreciate that the Company’s decision to restructure its operations has been made to ensure the future success of the business.

Please contact us if you wish to discuss further.

[31] A further letter sent to the applicant dated 25 August 2014 advised him that he would not be required to work out the remainder of his notice period and that his final day of employment was 24 August 2014.

[32] Mr Thomson was asked questions about a contractor - Archer Solutions. Mr Thomson emphasised that Archer Solutions is not an associated entity of the respondent. Nor had he stated that the applicant could become a contractor with Archer Solutions; rather, he had told him that he should contact Archer Solutions directly, if he wanted to work for them.

[33] Mr Thomson said that during a phone call on 24 November 2014, the applicant had asked if he could work for Mr Arora. He had advised the applicant that he would need to speak to Mr Arora directly about position vacancies and rates of pay. Even so, Southern Cross had never told the applicant he could not apply for positions with other companies.

[34] Mr Thomson disputed the applicant’s assertion that the alternative roles offered to him would result in the displacement of contractors. Rather, he would be a Southern Cross employee filling a vacancy that was previously covered by contractors on an irregular basis. He did not dispute that Mr Arora provided services for Run 40149. However, this did not change the fact that the applicant’s position of permanent part time weekend day shift employee, no longer existed.

[35] Mr Thomson stressed that the operational changes made by Southern Cross were not ‘negotiable’. In any event, the applicant’s assertions as to removing employees from weekend penalty rates were unsubstantiated, as was the allegation that employees of Southern Cross had been encouraged to become contractors. The applicant had been offered the opportunity to put forward his own alternatives in addition to the two redeployment options, but had failed to do so. Mr Thomson could not recall the applicant providing any ‘reasonable suggestions’. His offer to become a licensee could not be ‘reasonable’, as a licensee would be responsible for monitoring an area 24 hours, 365 days a year. The applicant had made it clear he wanted to work on weekends only.

[36] Mr Thomson denied that any phone calls to the applicant had ever been ‘audited’ (monitored).

[37] In cross examination, Mr Thomson explained that the ‘floating’ vehicle would be given specific call outs as they arose. If there were no calls or alarm traffic, that person would go home. The restructure meant that less vehicles sat idle. The redundancy of permanent part time weekend day shift roles was purely on the basis of labour cost - having a licensee work on Run 40149 cost the respondent less than having an employee perform that run. The reason the applicant was offered the other shifts was that they do not incur the same penalty rates.

[38] Mr Thomson said that the decision to remove 41218’s calls from Run 40149 was made some time during the consultation period of July/August 2014. This change had not taken place by 30 August 2014 and at that time Run 40149 was being performed by a contractor in a similar manner as that done by the applicant. The ‘floater’ vehicle had been extended to a full vehicle, with clients and calls moved to it. He acknowledged that the run was still being done, albeit by a contractor, rather than an employee.

[39] Mr Thomson was referred to the respondent’s attempts to ‘renegotiate’ the applicant’s employment contract. He had gained the impression that the applicant believed that the contract could not be changed without agreement and that it was ‘binding forever and a day.’ His own view was that where one party no longer agreed to be bound by the contract, then the contract would need to be changed. If agreement could not be reached, then there may be consequences of redundancy or termination of employment.

[40] Mr Thomson reiterated his view that setting the applicant up as a licensee was ‘setting you up to fail’ as licensees generally perform much more work than just a weekend day shift car. This was necessary to set off against significant costs of licensing, insurance and workers’ compensation. Licensees take a percentage of the head contractor’s (Southern Cross’) revenue. If the licensee failed, the effect was that Southern Cross would also fail. This proposal was not a reasonable suggestion by the applicant. In any event, Southern Cross reserved the right to offer licenses to persons of their choice.

[41] At this point in the cross examination, the applicant took issue with Mr Thomson over an alleged failure of the respondent to provide evidence that run 40149 was making a loss.

[42] Mr Thomson explained that his preference had been for the parties to meet in person, rather than have all negotiations in relation to redundancy conducted in writing. Verbal conversations were immediate, but emails could take time to be answered. This also ‘dragged the process out’. Mr Thomson observed that all of the other affected employees had had personal meetings with him. His own belief was that if the applicant had agreed to talk ‘face to face’, they may have come to some mutually beneficial arrangement. He believed that the respondent had engaged in the consultation process in good faith.

[43] Mr Thomson acknowledged that some contractors worked in the roster on a regular basis; while contractors generally worked on the weekends. Usually it would take three days training for someone to be competent on a run.

[44] Mr Thomson clarified that the invitation in the letter of 23 July 2014 (see para [24]) for the applicant to provide comments or suggestions was meant to address questions of how the restructure may affect the applicant’s personal circumstances relating to, for example, carers’ or family responsibilities. Operational decisions were the sole discretion of management. However, if the applicant had maintained his refusal to work other than weekend day work, then he would likely have been made redundant, even if personal reasons had been cited.

The applicant

[45] In written evidence, the applicant explained that he had received a phone call from Mr Thomson at approximately 4:00pm on 24 July 2014. He was advised that Southern Cross had been ‘restructured’ and that his weekend shift was to be made redundant. The applicant requested that all further communications about the matter be put to him in writing. The applicant claimed that background noise in a call Mr Thomson made to him on 25 July 2014 suggested to him that the call was being ‘audited’.

[46] Mr Thomson had advised that the weekend day shifts would be ‘given’ to Mr Arora in his capacity as a contractor to the respondent. Mr Thomson had also suggested that he become a contractor. They had a discussion about the effect of the applicant’s employment contract. The applicant requested that all communications be put in writing and later that day, he sent an email to Mr Thomson in the following terms:

‘Further to our conversation on 25/7/14 and your letter dated 23/7/14 I was wondering if you could clarify exactly how my permanent part time position is “redundant” and that my “post” will “cease to exist” - the work still exists after all. I would like to remind you/SXP that we have a contract for permanent part time employment which includes a schedule of standards hours and days which has been signed by you/SXP

Please correct me if I am wrong but it appears from what you are proposing that you/SXP wish to “give” my position to one of your contractors in order to avoid paying me weekend penalty rates - can you please confirm that this is what you/SXP intend.

Please be advised that I do not agree to any variation of our existing agreement dated 18/8/11 and wish to continue working according to the terms of that agreement.

Please conduct all future communications in writing.’

[47] The applicant received a further call from Mr Thomson on 26 July 2014 (which he also claimed was being ‘audited’). Mr Thomson advised him that weekend day shift work would be performed by Mr Arora and that he was to be offered weekday day shifts or weekday night shift work. The applicant rejected these offers and repeated his view that the respondent should continue to comply with his contract of employment. Mr Thomson also suggested that he could work as a contractor through Archer Solutions. In an email dated 28 July 2014, (see para [27]), Mr Thomson indicated that the changes they proposed conformed with the Act and he was given an opportunity to attend a consultation meeting. However, he was still required to make a decision by 6 August 2014.

[48] In an email dated 30 July 2014, the applicant declined to attend the meeting ‘On the basis of past experiences of meetings with Southerncross management and because I feel that any communications would be best conducted in writing’. He went on to ask some questions regarding the specifics of the proposed redeployment options. Mr Thomson responded the following day. The applicant complained that this email did not indicate how the national decision was negotiable. In an email of 1 August 2014, Mr Thomson clarified that the third option to which he had previously referred was redundancy.

[49] The applicant referred to an email sent by Mr Thomson, dated 6 August 2014, seeking advice on any decision the applicant had come to or ‘other options you may wish to pursue’. The applicant responded as follows:

‘I dont understand what you mean by “other options you may to pursue”. If there are any other options that I could pursue would it be possible for you to suggest what form they would take? With regards to your letter however I would like to reiterate that I decline your alternative “shift options” mainly because I would be financially disadvantaged. I would again like to remind you/SXP that we have a contract for permanent part time employment which includes a schedule of standard hours and days in accordance with the Security Services Industry Award 2010 and which has been signed by you/SXP

Please be advised that I do not agree to any variation of our existing agreement dated 18/8/11 and the ammended [sic] Schedule of Standard Hours/Days dated 16/12/11 and wish to continue working according to the terms of that agreement and that I am prepared to pursue the matter through the Fair Work Commission and the Office of the Fairwork [sic] Ombudsman.’

[50] The applicant described the final consultation meeting on 11 August 2014 as lasting approximately three minutes. In this meeting, Mr Thomson confirmed that the applicant had rejected the two redeployment options put to him and advised that the matter would be referred to the respondent’s HR officer in Sydney. The applicant complained that the notes taken by Mr Penny in this meeting were inaccurate.

[51] On 14 August 2014, the applicant received an email from Mr Thomson advising that the respondent intended ‘to commence with redundancy proceedings’ and an attached letter headed ‘Confirmation of Redundancy’ (see para [30]). The applicant responded the following day by asking why he had not been offered one of the other weekend day shifts and whether it was possible for him to be a licensee for Run 40149. An email from Mr Thomson made clear that neither of these alternatives were acceptable to the respondent. A further request met the same response on 18 August 2014. He received correspondence confirming that he was not required to serve out his notice period on 25 August 2014.

[52] The applicant referred to his receipt of an application and supporting witness statement in relation to an application made by Southern Cross, pursuant to s 120 of the Act. He complained that this material contained a number of inaccuracies and had not been sent to him. The applicant claimed that the respondent had not previously referred to any geographical restructure in a conciliation conference conducted about the matter. The applicant outlined a number of settlement offers made by the respondent by way of redeployment options he viewed as unsatisfactory and further financial offers of settlement. He viewed the respondent’s approach, including its position that the company may pursue costs, as unduly intimidatory.

[53] The applicant said that he had called Mr Arora at the Northside Depot on 30 August 2014. Mr Arora confirmed that he was undertaking Run 40149 and that the run was being performed in the same manner as before. He also spoke to an employee of Mr Arora at the same Depot on 20 September 2014. He photographed this employee, who was wearing a Southern Cross uniform.

[54] The applicant noted that the respondent had advertised online on 9 December 2014 for a Security Patrol Officer with Australian Defence Clearance to perform mobile patrols.

[55] The applicant explained that he had worked for the respondent for approximately nine years. He referred to an approach made to him by Mr Ken Connew of the respondent at some time in 2011 about whether he would consider becoming a contractor. He was a casual employee at that time and subsequently became a permanent part time employee. He explained that his signed agreement with Southern Cross was made in accordance with the Security Services Industry Award 2010 and included a Schedule of Ordinary Hours and Days, being Saturdays, Sundays and Public Holidays between 6:00am and 6:00pm. He noted that his Agreement did not specify that his position was tied to a particular run. He believed his contract was still in force. He had sought weekend work due to other unspecified commitments.

[56] The applicant described how Security Patrol Work was organised when he worked for the respondent. It involved mobile patrols over a geographical area known as a ‘run’ and attending a number of client sites, multiple times, throughout the shift. Each area would be assigned a run number. Keys for each site were kept in ‘run boxes’ and the restructure was achieved, in part, by reallocating these keys to different run boxes for different shifts. He referred to a definition of ‘Mobile Patrol Officer’ set out by the Federal Court in Australian Competition and Consumer Commission v Chubb Security Australia Pty Limited [2004] FCA 1750 at paras [8] and [14].

[57] The applicant explained that since he had worked for the respondent, there were two day shift runs in Northside Metropolitan Brisbane, Runs 40149 and 41114. These runs had been performed by employees, until the employee working on Run 41114 resigned. It was then performed by Mr Arora in his capacity as a contractor/licensee. He claimed that the work on Run 40149 had gradually been transferred to Run 41114 since then. He acknowledged that there had been so much work on Run 40149 that he generally would not finish the assigned work within his twelve hour shift. His view was that a Mobile Patrol Officer would need two to three weeks of experience before being able to complete a patrol run.

[58] The applicant disputed the use of the word ‘restructure’ by the respondent. Run 40149 had been rearranged a number of times before Southern Cross took the view that his position was redundant. The applicant said that there were three day shift patrol cars covering metropolitan and outer metropolitan areas, being Route 40149, the run serviced by Mr Arora and Run 41114 (the ‘floater’ car). Patrol calls could be reallocated between different runs and this had occurred in 2013. The applicant said that there were three day shift patrol cars covering metropolitan and outer metropolitan areas, being Route 40149, the run serviced by Mr Arora and Run 41114 (the ‘floater’ car). The applicant complained that this could mean that a run became ‘saturated’, resulting in missed calls and a contract cost to the respondent. He blamed this ‘saturation’ for speeding fines he had incurred in the past. He stressed that it had not been necessary to make employees redundant after run changes had been made in the past.

[59] I note that the applicant provided extensive documentary material, including patrol run sheets, correspondence between the parties, diary notes, letters of appointment, pay calculations, PAYG statements, photographs of the respondent’s contractors and relevant sites, a copy of the Security Services Industry Award 2010, extracts from social media and other websites relating to the respondent and its officers, maps of the relevant runs and the application filed by Southern Cross to vary the applicant’s redundancy pay. While I appreciate the applicant’s thoroughness, much of this material was of only passing relevance or very much incidental to the question to be considered by the Commission in this case.

[60] In cross examination, the applicant acknowledged that he had not had exclusive responsibility for Run 40149.

[61] The applicant restated that he had rejected the redeployment offers put forward by the respondent, as he had found them incommensurate. He believed that the process had been ‘artificially constrained’. He agreed he had been notified by Mr Thomson as to the operational changes that the respondent had proposed. He denied swearing at Mr Thomson when informed of this, but agreed he had sworn during the call and hung up the phone. He was obviously upset, as the proposed changes would have an effect on his future.

[62] The applicant clarified that the reason he suspected that the phone calls were being ‘audited’ was because he had heard another voice and thought it odd that Mr Thomson was calling from a place, other than his own office. He could not say whether his calls had been ‘audited’ in the past. He denied distrusting the respondent, but then clarified that he trusted the respondent ‘in an employment relationship level’. Nor did he accept that a lack of trust was the underlying reason for him requiring all communications to be in writing and refusing to attend consultation meetings.

[63] The applicant did not believe that he had been given a justifiable rationale for his redundancy. He could not see how losses to the business would be addressed by his own redundancy. He could not say which other employees had been affected by the decision. He believed that the respondent was on a ‘crusade’ to replace employees with contractors. While the use of contractors was commonplace in the industry, he thought that this was often done by way of ‘sham’ contracts. The applicant observed that he did not believe what the respondent had purported to do in the restructure was ‘outsourcing’; rather, it was ‘contracting’. He did not believe that the respondent or its management had any malicious ulterior purpose in relation to him personally in making him redundant.

[64] The applicant said that he had not been aware that the meeting he had attended on 11 August 2014 was to be the final meeting between the parties, although he acknowledged that he had been advised that the consultation period had ended.

[65] In response to a question from me, the applicant confirmed that he was not willing to consider any work, other than weekend day work.

[66] The applicant denied that he had made this application knowing that it had no reasonable prospects of success.

SUBMISSIONS

For the respondent

[67] In written submissions for the respondent, Mr Gorval put that the applicant’s dismissal was a case of genuine redundancy. The evidence demonstrated that the applicant had been employed on the part time weekend day roster, as a Security Patrol Officer under the Security Services Industry Award 2010. After a review of the business, the respondent determined that it would restructure certain security routes. The route worked on by the applicant was distributed to a licensee/contractor and the applicant’s role ceased to exist. In these circumstances, that job was no longer being performed by anyone employed by the respondent.

[68] Mr Gorval set out the circumstances leading to the applicant’s redundancy as follows. The applicant had been notified of the restructure on 23 July 2014 and also that he was at risk of redundancy. He was advised that there were two redeployment options open to him, both with the same base rate of pay, and that he should attend consultation meetings with the respondent during the consultation period ending 6 August 2015. He had had a conversation with Mr Thomson on 25 July 2014 in which he said he would not attend consultation meetings. The applicant was advised in writing on 6 August 2015, that the consultation period had ended and was invited to a final redundancy meeting. Written confirmation of his redundancy was provided on 14 August 2015.

[69] Mr Gorval referred to the meaning of ‘genuine redundancy’ in s 389 of the Act and the relevant clause of the Fair Work Bill 2008 Explanatory Memorandum. For a redundancy to be genuine it was sufficient that:

a person’s employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

the employer has complied with its consultation obligations under any applicable modern award or enterprise agreement; and

it was not reasonable in the circumstances for the person to be redeployed within the enterprise of the employer or a related business.

[70] Mr Gorval relied Howarth & others v Ulan Coal Mines Limited [2010] FWA 167 (‘Ulan Coal (1)’) as authority for the proposition that terminations which were the result of outsourcing duties to contractors could be considered a genuine redundancy; See also: Dibb v Federal Commissioner of Taxation (2004) 136 FCR 388 (‘Dibb v FCT’) and Shop, Distributive and Allied Employees’ Association v Bunnings Building Supplies Pty Ltd (2004) 134 IR 237 (‘SDA v Bunnings’). This was especially so where an employer sought to improve productivity and efficiency; See: Ulan Coal Mines Limited v John Howarth and others[2010] FWAFB 3488 (‘Ulan Coal (2)’). In that case, while the matter was remitted to the Commissioner at first instance to deal with the question of redeployment, it was open for the Commissioner to have concluded that a job was no longer required to be performed by anyone because of changes in the employer’s operational requirements.

[71] Mr Gorval submitted that a redundancy could be genuine, in certain circumstances, even where the duties of a redundant position are still being performed by another employee or redistributed to other positions; See: Eames v Orrcon Operations Pty Ltd [2014] FWC 748 (‘Eames v Orrcon’) and Kekeris v A Hartrodt Australia Pty Ltd[2010] FWA 674 (‘Kekeris’). There was a distinction between the job and the work of an individual no longer being required; See: Carling v Anglo Coal (Dawson Services) Pty Ltd[2014] FWC 5320 (‘Carling v Anglo Coal’).

[72] Mr Gorval said that the evidence of Mr Medhurst and Mr Thomson demonstrated that Southern Cross had made nation-wide operational changes in order to increase efficiency, reduce costs and prevent continuing business losses. The applicant had performed work on one route and a contractor had performed work another route in the same geographical area. A third ‘floater’ car was used on occasion. The respondent had determined that this structure represented a barrier to efficiently meeting client demands and the applicant’s route ran at a loss. The applicant’s route was taken over by the contractor. His duties were therefore redistributed to the contractor and other clients were redistributed to other runs. Mr Medhurst’s evidence, which was not challenged by the applicant, showed that there had been a reduction in the number of calls in each run and only one missed call over the two month period, rather than 109 missed calls previously. This case was analogous to the circumstances of Ulan Coal (2). The job which the applicant performed was no longer being performed by anyone. This can be distinguished from the duties of his job continuing.

[73] Mr Gorval put that the respondent had complied with the relevant consultation obligations under the Security Services Industry Award 2010. These required that the employer discuss with affected employees (and their representatives), the introduction of change (in this case, the elimination of job opportunities and restructuring of jobs), the likely effects of those changes on the employees and any measures to avert or mitigate any adverse effects. The discussions should occur as early as practicable after a definite decision has been made and any, and all relevant information, should be provided to the employees. The employer was not required to provide confidential information or information the disclosure of which would be contrary to the employer’s interests.

[74] Mr Gorval submitted that the evidence of Mr Thomson illustrated that the respondent had fully complied with, and in fact exceeded the consultation requirements of the Award. The applicant had been advised on 23 July 2014 of the ‘background and rationale’ for the decision made by the respondent and that he was at risk of redundancy. It also advised him of measures that could be taken to avert or mitigate his redundancy. While a number of attempts to have ‘face to face’ meetings with the applicant were made, he refused to participate. In any event, the respondent had engaged in extensive written correspondence with him which set out the relevant information. A final meeting was held with him to confirm his redundancy.

[75] Mr Gorval said that redeployment obligations of an employer could be met where an employee rejected a redeployment opportunity that was a lower paid, non-supervisory position; See: Carling v Anglo Coal. Additionally, it would not be reasonable for employees to be redeployed into work which was being carried out by contractors. An assessment of whether a redeployment option was reasonable or not would require a consideration of all the circumstances; See: Fisher & others v Downer EDI Mining Pty Ltd[2013] FWC 8020 (‘Fisher v Downer EDI’).

[76] Mr Gorval noted that in this case, the applicant had been offered two redeployment options:

A full time week night position; or

A part time day position.

These positions were in the same geographical location, had the same base rates of pay and were in the same geographic location. Material disadvantage experienced by the applicant, due to the loss of weekend penalty rates, was not determinative, as there were no other positions available to offer him. Mr Gorval stressed that Archer Solutions was not an associated entity of the respondent and it was not open to the respondent to offer positions with that company. It was noted further that since the applicant’s termination, three other redeployment roles had become available. All of these were offered to him by way of settlement and rejected by him. These refusals illustrated his intransigence.

[77] In further written submissions, Mr Gorval claimed that the applicant had grossly misinterpreted the law in relation to ‘genuine redundancy’. The evidence adduced in cross examination confirmed that:

there was an operational change within the respondent’s business that resulted in the applicant’s job no longer being required to be performed by anyone;

the respondent had exceeded its consultation obligations under the Security Services Industry Award 2010; and

the respondent had offered the applicant two reasonable redeployment options, which he refused.

[78] Mr Gorval said that the applicant’s case appeared to proceed on the flawed basis that the performance of work by Mr Arora in his capacity as a contractor, was unlawful. The applicant had acted unreasonably and had rejected several ‘without prejudice’ offers made to him. He insisted that the only work he would consider was weekend day work. Moreover, the applicant had refused to accept the Commission’s directions as to the prosecution of his case.

[79] Mr Gorval submitted that the application should be dismissed on the basis that the termination of his employment was on the grounds of genuine redundancy.

For the applicant

[80] The applicant provided a 39 page written submission (much of which was a repetitive, point by point refutation of the respondent’s evidentiary material) and another 41 page written submission after the hearing. Much of it was repetitive of the material in his earlier statement. To the extent that this is so, I do not summarise it here.

[81] The applicant took issue with some of the terminology in the respondent’s material, which I briefly refer to here:

the use of the word ‘route’ rather than the use of the word ‘run’ in reference to patrol ‘runs’. He said that this implied that the runs were rigidly defined, as was the case with a bus ‘route’. This was not correct as the ‘run’ involved randomly attending specific sites and alarm calls;

the use of the word ‘guard’, which he said placed an undue emphasis on ‘static guarding’ and detracted from the real duties of mobile security patrols;

the applicant claimed that the words ‘more effectively’ in relation to the restructured runs, should be read to mean ‘at reduced labour cost’; and

the respondent had referred to the contractor having ‘subsumed’ Run 40149. The ordinary meaning of the word ‘subsumed’ referred to the inclusion of one thing into a larger thing. It had really been ‘transferred’ to Mr Arora. The applicant also used the terms ‘redistribution’ in this context.

[82] The applicant complained that his suggestion of having duplicate keys for individual sites had not been taken up by the respondent. He also repeated his complaint of the ‘saturation’ of Run 40149 and a perceived failure of the respondent to change the span of ‘floater’ cars.

[83] The applicant referred to the use of the respondent’s term ‘restructuring’. There were two aspects to this submission. The first related to the transfer of Run 40149 to Mr Arora (which he termed ‘terms of engagement’). The second related to ‘redistribution of duties’ between different runs. The applicant noted that Run 40149 had been reorganised in this manner in the past, without it being necessary to terminate any employee. Mr Thomson’s evidence referred to reorganising Run 40149 so that it no longer had to pass a bridge toll. The use of the word ‘restructure’ in relation to Run 40149 by the respondent was unclear. As a result, there was no valid reason for his redundancy; See: Foster’s Group Ltd v Wing (2015) 148 IR 224 (‘Foster’s v Wing’).

[84] The applicant outlined the use of three dayshift patrol cars in the Metropolitan and Outer North of Brisbane, being Run 40149, the run given to Mr Arora in his capacity as a contractor and the ‘floater’ car. As this was not working effectively, more work had been allocated to Mr Arora, resulting in a ‘gradual erosion of employee fulfilled 40149 in favour of the licensee Vishal Arora’. A direction to drivers to attend to all alarm calls up to fifteen minutes before the end of their shift was inconsistent with the Company’s stated purpose of ensuring that all runs finished on time.

[85] The applicant put that the respondent had provided no evidence of operational cost savings as a result of the restructure of his run, but had made unsupported assertions as to the amount it had saved. Even on the calculations provided by the respondent, the overall saving was approximately 0.2% of the respondent’s annual turnover. He noted that Dunn and Bradstreet had stated that the respondent had made approximately $2 million in profit in 2013. Nor had Southern Cross provided evidence which demonstrates that the redistribution of alarm calls to different depots had resulted in a reduction in alarm calls and costs. The respondent had not provided evidence as to specific contracts it had concerns of losing or that this circumstance was any different to the gaining and loss of contracts in the ordinary course of business.

[86] The applicant criticised the consultation period as only ever referring to the implementation of the removal of employees from shifts with penalty rates. He suggested that there had only been real rearrangements of the runs after he had photographed one of Mr Arora’s contractors performing Run 40149. The applicant repeatedly highlighted his belief that Mr Arora and his employees performed work on this run in the same manner in which he had performed it (this was never disputed by Southern Cross).

[87] The applicant said that the consultation process had not really given him a chance to properly negotiate an outcome. Correspondence referring to the consultation process had not really identified the options available to him. He claimed that the reference was to a ‘proposed’ restructure/redundancy and had not used the word ‘termination’. Any alternative positions put forward by him were dismissed. The redeployment options offered to him were ‘artificially restricted’ and really were a type of ‘adverse action’ in that he was being pressured to accept a change to his contract. He had not really been told of what the ‘options’ open to him were until 6 August 2014.

[88] The applicant believed that the respondent was not really offering him an alternative ‘position’; it was just offering different roster slots, during the week which would have involved replacing an ‘employee/contractor’ of Archer Solutions. This was true of the positions he had subsequently been offered in settlement discussions with the respondent. He suggested that the respondent had breached the Act, by encouraging him to become a contractor with Archer Solutions. In any event, the positions offered to him were not commensurate with his previous position. The respondent had asserted that all other affected employees had accepted some redeployment option, but provided no evidence to show that this was the case.

[89] The applicant refuted the view of the respondent that he had not properly participated in the consultation process. He believed that their preference for in person meetings, rather than having all communications in writing, was an attempt by the respondent to remain unaccountable for its actions. He had put to the respondent that he wanted only to work on a weekend day shift, or other commensurate shifts. These shifts were not offered.

[90] The applicant said that Mr Thomson, in referring to his statement that ‘the Company no longer agreed with the contract’ had exhibited an intent to repudiate the contract. He had not been ‘offered’ redundancy, but had been warned that he was at risk of redundancy. The applicant asserted that the respondent’s use of the word ‘redundancy’ really meant ‘termination without payout.’ The respondent had a fundamental misunderstanding of the nature of the employment contract, as he did not consent to his replacement by Mr Arora.

[91] The applicant noted that the respondent had openly admitted that a purpose of the restructuring process was to reduce labour costs, specifically by removing employees from shifts subject to weekend and public holiday penalty rates. There was no legal or factual link between the ‘restructure’ and his job ceasing to exist, unless the respondent admitted that it was replacing its employees with contractors. This was illegitimate; See: Australian Municipal Administrative, Clerical and Services Union v Greater Dandenong City Council [2000] FCA 1231. The respondent had not properly presented the loadings and penalty rates in the alternative shifts offered to him, in an attempt to make their case look more favourable. He could not see how the restructure improved the respondent’s productivity as the same number of people (whether they be contractors and employees) were working the same number of contact hours.

[92] The applicant submitted that his ‘job’, in the sense of a set of duties that were still required to be performed, had not been ‘eliminated’. The six weekend day shifts were still being performed by contractors, but the respondent had merely ‘redescribed’ employees as contractors; See: Re Porter; ex parte Transport Workers’ Union of Australia (1989) 34 IR 179.

[93] The applicant put that the respondent’s reliance on Ulan Coal (1), Ulan Coal (2) and SDA v Bunnings was misconceived as these cases stood for the proposition that terminations which were the result of outsourcing duties to contractors could be considered genuine redundancies as long as the duties were intermittent or ancillary functions or where there was a genuine requirement to reduce staff to improve productivity. Moreover, Dibb v FCT had been quoted out of context by the respondent as that case was about redundancy for tax purposes, rather than under the Fair Work Act 2009. It could not be said that the roles referred to in Suridge v Boral Window Systems Pty Ltd t/as Dowell Windows [2012] FWA 3126 (‘Suridge v Boral’) were anything but ancillary or intermittent.

[94] The applicant submitted that this case could be distinguished from Jones v Department of Energy & Minerals (1995) 60 IR 304 and Kekeris as there, an employee’s duties had been subsumed by distribution amongst more senior or qualified employees. Eames v Orrcon and Carling v Anglo Coal should also be distinguished, as these cases involved a downturn where the respondent needed fewer people to do a particular task.

[95] Vukoja v Toyota Motor Corporation Australia Limited[2014] FWC 2764 was relevant to this case as the respondent had ‘artificially’ constrained the redeployment options available to him; See: Fisher v Downer EDI and had not acted in good faith in the final meeting on 11 August 2014. This meeting had lasted 3 minutes and the employer had just restated the two redeployment options he had already rejected. The consultation period had consisted of two phone conversations, seven email exchanges and one three minute meeting over eleven days. This contributed to a finding that the consultation was ‘artificially restrained’.

[96] The applicant referred to offers of other roles made to him in a Calderbank letter. He complained that these had been made to him in the context of an application made by the respondent to the Commission to reduce his redundancy entitlements, pursuant to s 120 of the Act. The respondent’s approach in relation to that application was markedly different to the one that it had adopted in this application.

[97] The applicant insisted that his job was not redundant as it was still being performed in its entirety, as at 20 September 2014 (albeit by Mr Arora and/or his employees). The respondent may have changed the manner in which that work was performed after that time in order to put a gloss over what they had done.

[98] The applicant submitted that the respondent’s jurisdictional objection should be dismissed and the merits of the application should be determined.

[99] In a further written submission lodged after the hearing, the applicant referred to the definition of ‘genuine redundancy’ set out in s 389 of the Act. He argued that his job still existed and was being performed by ‘someone’ under the direct control and supervision of the respondent.

[100] The applicant noted that the respondent had denied that its motivation was to remove employees from weekend penalty rates. However, Mr Medhurst had acknowledged that the purpose of the restructure was to reduce labour costs. The respondent had previously attempted to argue that there were productivity gains through the use of Mr Arora’s services. It could not be seriously countenanced that Mr Arora could be paying his ‘employees’ in accordance with the Act and retaining some profit for himself. There were no properly articulated genuine operational reasons for his redundancy within the meaning of Roy Morgan Research Ltd v Baker[2013] FWCFB 8936. Cost savings based on the avoidance of the Award should not be considered in determining whether the operational reasons were ‘genuine. Seeking to avoid the terms of the Award could not be said to be an ‘operational requirement’. The ‘operational requirement’ admitted by the respondent, being avoidance of penalty rates payable under the Award, was a ‘prohibited reason’ for his dismissal.

[101] The applicant said that there was no doubt that an employer seeking to deprive an employee of penalty rates would be acting to the employee’s detriment; See: Textile Clothing & Footwear Union of Australia v Huyck. Wangner Australia Pty Ltd [2008] FCA 1504, Construction, Forestry, Mining & Energy Union v Endeavour Coal Pty Ltd [2013] FCCA 473, Patrick Stevedores Operations Pty Ltd No 2 v Maritime Union of Australia [1998] HCA 30, Australian Workers’ Union v BHP Iron-Ore Pty Ltd [2001] FCA 3; McIlwain v Ramsey Food Packaging Pty Ltd [2006] FCA 828 and Blair v Australian Motor Industries Ltd (1982) 61 FLR 283. While this case was not a general protections application, a prohibited reason had been openly admitted by the employer and ‘painted’ as an ‘operational requirement’.

[102] The applicant claimed that the respondent had not given up management control of the runs and that it had not engaged in actual ‘outsourcing’. The case of Finau v Free Enterprise Delivery Service [2014] FWC 955 did not make clear whether the number of employees had been reduced on a certain shift by replacing them with contractors. Where an employee was rehired on lower wages, immediately after the termination of an employee on redundancy grounds, an employer would be required to demonstrate that outsourcing resulted in more efficient work practices.

[103] The applicant acknowledged that he had given evidence that there were ‘non-compliant’ operators in the industry, which represented competition to the respondent. However, he was not arguing that the entire employment strategy of the respondent should be changed. He repeated his view that there was no evidence of cost savings to the respondent as a result of the restructure - even on the respondent’s evidence, Run 40149 remains unviable. It was not proper for the respondent to simply hand over an unviable run to a contractor - the respondent had a responsibility to ensure that contractual promises to clients could be feasibly performed as a result. Nor could it be said that there had been operational efficiencies created by his redundancy. The respondent should have provided more in depth financial reports, projected financial forecasts and other materials to support its case. In fact, the respondent had sought to resist providing material, pursuant to an Order to Produce issued by the Commission.

[104] The applicant did not accept that claims by the respondent of ‘business losses’ were substantiated. This industry was one where contracts were won and lost all the time. In light of the above submissions, there could not be any genuine operational requirements for his redundancy. On the contrary, there was a positive operational requirement to maintain the employment of persons to work on Run 40149 for safety and licensing reasons. There was no evidence that ‘missed calls’ meant that the respondent had lost money.

[105] The applicant refuted the respondent’s view that the job no longer existed. The respondent still had contracts for Run 40149 and the work was still being performed in a similar fashion. Mr Thomson had admitted that he had made the decision that Run 41114 would not operate on weekend day shifts after the loss of a particular client. The applicant believed that the respondent maintained control over the work that was purportedly being performed by ‘contractors’.

[106] The applicant submitted that there was a difference between ‘outsourcing’ and ‘contracting out’. The former would entail contracting out the ownership, management and even staff, as a function of its business to another. This had not occurred here. He had sought to lead evidence from Mr Arora to the effect that he was using the respondent’s management systems and equipment as this would demonstrate that Mr Arora had been integrated into the respondent’s structure.

[107] The applicant put that the case law emphasised that ‘contracting out’ involved some change to the manner in which the work was done, so as to give rise to productivity efficiencies; See: Hawkins v Ingham Enterprises [2001] QIRComm 180; Stones v Simplot Australia Pty Limited [1997] IRCA 175; Ulan Coal (2); Suridge v Boral; Cann v Rockdrill Services Australia Pty Ltd[2014] FWC 701; Teterin v Resource Pacific Pty Limited[2014] FWC 1578 (‘Teterin’) and Secure Employment Test Case [2006] NSWIRComm 38.

[108] The applicant referred to the transfer of business provisions of the Act (ss 310 and 311). He submitted that it was possible that there had been a transfer of business between the respondent and Mr Arora as there was a connection between the respondent and Mr Arora’s business within the meaning of s 311(1)(d). This had implications for outsourcing, insourcing and labour hire arrangements. Nor did Mr Arora exercise complete control over the transferred work. Mr Arora’s business was the provision of security services, not of labour hire and he was providing ‘contractors’, rather than his own employees to the respondent.

[109] The applicant addressed the meaning of the phrase ‘by anyone’ in s 389(1)(a). The ordinary meaning of the phrase indicates the clear meaning of the Act is that the job is not required at all, due to changes in operational requirements; See: Millen v Electrix Pty Ltd [2014] FWC 6912 and Pham v Alliance Contracting Pty Ltd[2014] FWC 6890. The term should not be read down to mean ‘anyone directly employed by the business or under an Award’.

[110] The applicant differentiated between a ‘primary restructure’ and a ‘geographical restructure’. The ‘primary restructure’ entails a process whereby there were no longer any employees working on weekend penalty rate shifts. Mr Arora was performing Run 40149 with a total shift time and call quantity which was substantially the same. It could not be said that there was now one less job. ‘Job’ was defined as a collection of duties, not the ‘term of engagement’, being a permanent part time weekend employee. The ‘job’ still existed as the ‘duties’ were still being performed in their entirety. The secondary ‘geographical restructure’ involved the redistribution or restructure of individual runs. It was not physically possible for his twelve hour run to have been ‘subsumed’ into another person’s twelve hour job. There had been no productivity gains by ‘redistributing’ his job. There was no real evidence of ‘restructuring’; merely the replacement of his job by a contractor; See: Angwin v Dimmeys Stores Pty Ltd[2014] FWC 3633 and McIlwraith v Toowong Mitsubishi Pty Ltd[2012] FWA 9662.

[111] The applicant referred to the consultation requirements of s 389(1)(b) of the Act and cl 8.1 of the Award. He complained that the notification had been unclear, as it only referred to a ‘proposed redundancy’, rather than a ‘proposed redeployment’ or ‘proposed changes’. The respondent had not properly identified that it was seeking to remove employees from shifts attracting penalty rates under the heading of ‘rationale’. The two redeployment options or redundancy could not be said to present any ‘choice’ to the applicant. His own suggestion that he become a licensee was rejected. The employer had made no attempt to discuss the adverse effects with him, although he had raised his objection to those effects. The respondent had made repeated references to the applicant providing his own suggested alternatives, but did not identify what they might be.

[112] The applicant said that none of the emails of 11, 23, 30, 31 July or those sent on 6 and 8 August 2014 provided sufficient detail of the proposed changes or the process involved. 11 working days was not a sufficient period for consultation. He had tried calling his Union (United Voice), who had proposed to act for him on 21 August 2014, but had subsequently informed him they would not do so.

[113] The applicant claimed that Mr Medhurst’s evidence disclosed that a decision had been made to restructure from the beginning of June 2014, but the applicant was not advised until 25 July 2014. This demonstrated a lack of good faith in the consultation process and did not permit him to have any influence in the decision making process or in suggesting alternatives; See: Ulan Coal (2); Cameron v Transfield Services (Aust) Pty Ltd[2012] FWA 3799; Baker v Roy Morgan Research Ltd[2013] FWC 6694; MacLeod v Alcyone Resources Ltd[2013] FWC 9311; and Westpac Banking Corporation v Finance Sector Union of Australia T3225.

[114] The applicant believed it would have been reasonable for him to be redeployed in the restructured job, after changes to the run had been made. He said that the respondent had not used the terms, ‘job’, ‘position’ and ‘engagement’ with sufficient clarity throughout the process. He sought to clarify these terms as follows:

‘These “jobs” are not currently occupied by employees and so are not attached to any position. My contract of employment show that my position with the company is “weekend mobile patrol officer” not tied to performing a particular Run. According to the wording of s 389(1)(a) operational requirements relate to the job and the position only becomes redundant once the job is no longer required.’

He distinguished this from the ‘term of engagement’, being, in this case, the role of a permanent part time weekend employee.

[115] The applicant said that the respondent should have properly considered displacing casuals or labour hire staff to comply with its redeployment obligations; See: Suridge v Boral, Strickland v Newcastle Recycling Pty Ltd[2014] FWC 6118 and Teterin. Redeployment options covered ‘job’, ‘position’ and ‘work’. It was not open to the respondent to conclude that it was not reasonable to consider redeployment simply because the applicant had rejected two incommensurate roles. It would have been reasonable to redeploy him to one of the weekend day shifts being performed by the contractors. He noted that there were four other weekend day shifts covered by daily hire contractors from Archer Solutions - a labour hire company. He submitted he could have been redeployed into one of these positions, as they could be terminated at will.

[116] The applicant acknowledged that while this was not an application pursuant to s 120 of the Act, he put that the lack of commensurability of the positions offered to him was relevant. The part time weekday shift redeployment option would have resulted in a 39% reduction in his income and that there was some risk of the respondent losing a contract relevant to this work, meaning that his job would be less secure. The permanent weekday nightshift meant that he would receive $24.30 per hour, rather than $29 per hour on Saturdays and $39 per hour on Sundays. There would also be health consequences arising from interrupted sleep patterns, particularly for older employees. The applicant provided a number of journal articles on this subject. The applicant observed that the second option would result in a reduction of his own free time. Outside work commitments were relevant to a consideration of the commensurability as well. The applicant claimed that the redeployment options should have been commensurate with the position as set out in his contract of employment; See: Szanto v ISS Facility Services Pty Ltd[2013] FWC 3270.

[117] The applicant submitted that the respondent’s jurisdictional objection should be dismissed and the merits of the application be considered. Ultimately, the applicant sought reinstatement to his weekend shifts with backpay since his dismissal.

CONSIDERATION

Meaning of redundancy

[118] Section 389 of the Act expressly defines ‘genuine redundancy’ 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.’

[119] While the above definition is very much an historically unremarkable, shorthand definition of redundancy, it is particularly important not to ignore the long held authorities which have considered the concept of redundancy in a variety of different circumstances. The applicant’s approach was to focus on the words ‘by anyone’ in s 389(1)(a) above. As I understand his argument, the applicant uncontroversially (meaning not disputed by the respondent) relied on the job he had been doing now being performed by a contractor (Mr Arora) to prove his job was now performed by someone else. It followed he could not be redundant if his job was still required to be performed by someone else.

[120] This approach is far too simplistic and ignores the correct focus being on the position, rather than the person; See Foster’s v Wing. The applicant misunderstood the relevant authorities and the meaning of ‘anyone’ in the present context. In my view, ‘anyone’ means a person directly employed by the employer. It does not mean a person who may be a contractor, or another person who absorbs the redundant employee’s job within his/her functions. These are circumstances not unfamiliar to anyone with knowledge of the meaning of redundancy in a variety of different circumstances.

[121] For completeness, the Explanatory Memorandum to the Fair Work Bill 2008 developed the meaning of ‘genuine redundancy’ as follows:

‘Clause 389 – Meaning of genuine redundancy

1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.

1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548. The following are possible examples of a change in the operational requirements of an enterprise:

a machine is now available to do the job performed by the employee;

the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.

1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.

1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.

Illustrative example
Cath is one of four chefs at Kat’s Bar and Bistro. She has been working at the restaurant for five years. Six months ago a new restaurant opened up across the road and business has been steadily declining. The manager, Kristy, has made the decision to cut the number of chefs from four to two as only two chefs are needed to manage the reduced workload. There are no redeployment opportunities for either of the chefs as Kat’s bar and bistro only employs a small number of staff and has no associated entities. Before deciding to make employees redundant, Kristy checks the award that applies to the chefs and finds that there are no obligations to consult about the redundancy. Kristy dismisses Cath and one other chef and provides them with notice of termination under the NES and pays all amounts owing on termination (e.g., untaken annual leave).
Based on these facts, Cath’s dismissal would be a case of genuine redundancy and she would not have been unfairly dismissed.
However, Kristy’s reason for selecting Cath as one of the employees to be dismissed was that she had recently complained to her union that she was not being paid the correct allowances under the award.
While this would not change a finding that it was a genuine redundancy, it may contravene the general protections as it may involve Kristy taking adverse action (being the dismissal) against Cath because she exercised a workplace right to complain to the union about not receiving her entitlements.’

[122] The applicant had undertaken extensive research as to the meaning of redundancy in the context of the authorities of this Commission, its predecessors and other industrial tribunals. He relied on words, phrases and extracts from the authorities which he claimed supported his position that his dismissal was not a case of genuine redundancy. Unfortunately, his reliance on the authorities cited was either selective, misunderstood, taken out of context or just plain erroneous. Despite my constant reminder that a redundancy included circumstances where the work was still required to be performed, but in a different way; namely as here, by the outsourcing of that work, the applicant simply would not listen or accept my advice. He brazenly told me that I was wrong. I remind the applicant of a recent Commission appeal decision, Schneider v Apollo Holidays Pty Ltd[2015] FWCFB 1259, in which a senior Full Bench, including the President, Ross J, said at para [28]:

‘[28] In determining whether a dismissal is a ‘genuine redundancy’ the Commission is concerned with whether 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’. A decision by an employer to outsource all of an employee’s duties is clearly a redundancy [emphasis added].’

[123] Regrettably, the applicant’s approach to his case was singleminded, unbending and belligerent. Despite the respondent readily conceding the facts the applicant desperately wanted to prove, he ploughed on regardless and ignored my advice that proving accepted facts was a waste of time. While I accept that unrepresented applicants do not always understand the best way of conducting their case and often tend to focus on issues extraneous or irrelevant to the matters the Commission is required to take into account, in this case, despite my best endeavours, the applicant just chose to ignore my advice and even challenge it. To this extent, I found the applicant to be both an unacceptably argumentative witness and advocate, whose dogged determination to prove that he was right and everyone else was wrong, was most disconcerting and unhelpful.

[124] Further, the applicant sought to misinterpret or dispute the meaning of words, including route, run, guard, subsumed, restructuring, job, position and engagement. He queried whether the terms as they appeared in letters to him, such as ‘proposed redundancy’ should have been ‘proposed redeployment’ or ‘proposed changes’. None of this intensive forensic analysis aided the applicant’s case or addressed the central issue to be determined in this case.

[125] In addition, the applicant made silly sweeping allegations challenging the respondent’s evidence. For example, he claimed that there was no evidence:

a) that redeployment had been offered to other redundant employees; or

b) that the respondent would make any cost savings by the restructure.

The fact is that there was evidence of Mr Medhurst and Mr Thomson of both of these matters. The applicant brought no evidence to challenge or contradict Mr Medhurst’s or Mr Thomson’s evidence. I accept their evidence. The applicant misunderstands the nature of sworn evidence, if he believes that simply saying the respondent’s witness evidence should not be accepted is the end of the matter.

[126] In addition, the applicant made some bizarre and curious submissions which were baseless and without foundation. These included that:

a) some of the information he had requested could have been ‘doctored’ or ‘altered’;

b) the consultation process was ‘manipulated’ or ‘calculated’;

c) ‘face to face’ meetings with management were an attempt to be unaccountable for its actions;

d) when the respondent used the word ‘redundancy’, it meant termination without payment;

e) he suspected Mr Thomson was ‘auditing’ his calls because he could hear other voices over the phone;

f) his case involved an adverse action claim in that he was ‘dismissed for a prohibited reason’, namely, that the respondent was avoiding paying penalty rates;

g) he believed his suggestions for redeployment do not have to be reasonable, but the respondent’s offers of redeployment must be;

h) as the same number of people, whether employees or contractors, were performing the same work, there could be no savings for the respondent;

i) Mr Arora must be in breach of the Award by not paying his employees the same rates that he had been paid. There was absolutely no basis for such an allegation;

j) there was a ‘connection’ between Southern Cross and Mr Arora’s company for the purposes of a transfer of business. There was no evidence of any connection between the two companies; and

k) other employers in the industry were involved in illegally engaging contractors.

[127] In order for the applicant to understand the meaning of ‘redundancy’, I set out below extracts from a number of relevant authorities.

[128] The meaning of the term ‘redundancy’ may vary depending on the particular industrial context and/or the text of an applicable industrial instrument. In Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10, Gleeson CJ and McHugh J held at [12] that:

‘In the industrial context, redundancy of position is not a concept of clearly defined and inflexible meaning.’

[129] More recently, a Full Bench of this Commission in Construction, Forestry, Mining and Energy Union and others v Spotless Facility Services Pty Ltd [2015] FWCFB 1162 said at para [66]:

‘[66] The meaning of the word ‘redundancy’ is not fixed and the term will take colour from its context. However, in any relevant context it is the abolition of a position which leads to that position being redundant. The cause of the abolition of the position – whether business restructure, technological advance, loss of contract/ordinary turnover or otherwise – is a separate matter, albeit one which may determine the entitlements of the redundant employee. Indeed the presence of the express exclusion in s.119 (and in the predecessor TCR case) demonstrates that the abolition of a position as a result of ordinary and customary turnover is a redundancy; albeit one that does not give rise to an entitlement to redundancy pay. The exclusion would otherwise be entirely otiose. As we have earlier indicated, s.119 does not define ‘redundancy’. It merely sets out the circumstances in which an employee will or will not have an entitlement to redundancy pay under the NES. Doubtless employees who fall within the class have been dismissed by reason of redundancy, but ‘redundancy’ is not thereby so narrowly confined. Further, although we accept that the industrial contextual considerations identified by Spotless lend some support to its contention, other industrial contextual considerations cannot be ignored. There is firstly the incorporation of the redundancy provisions of the Building On-Site Award and the Plumbing Award which each carry a definition of redundancy which is contrary to the meaning of redundancy contended for by Spotless [footnote omitted].’

[130] In Foster’s v Wing, Habersberger AJA referred to a number of the higher court authorities on the subject of redundancy. At pages, 230-233, His Honour said:

‘The Meaning of Redundancy

33. A clear guide to the meaning of redundancy is to be found in the judgment of the Full Court of the Supreme Court of South Australia in R v Industrial Commission (SA); Ex parte Adelaide Milk Supply Co-operative Ltd. In that case Bray CJ said that:

“ … the concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him but because the employer no longer wishes the job the employee has been doing to be done by anyone. ”

Bright J expressed a similar view:

“The word ‘redundant’ does not occur in the Act. In its industrial sense it is not defined in the Oxford Dictionary. The application which I have already set out attempts a definition for the purpose of the proposed award. A consideration of the cases leads me to think that the question of the redundancy of an employee is linked to the question of the continued utility of the job which he is performing. In other words it does not relate to the personal competence of the employee in the job which he is performing. If I am right in this, then in its widest form the concept of redundancy connotes that an employee becomes redundant whenever (and for whatever reason) his employer no longer desires to have performed the job which that employee was doing. ”
34. The meaning of redundancy was recently considered by the Full Court of the Federal Court of Australia in Dibb v Commissioner of Taxation (Cth).That case arose out of a private ruling by the Commissioner concerning the tax liability of Mr Dibb in respect of a lump sum settlement received by him following the termination of his employment as a district manager with a finance company. One of the issues was whether Mr Dibb's dismissal was by reason of his bona fide redundancy within the meaning of s 27F of the Income Tax Assessment Act 1936 (Cth). In a joint judgment, Spender, Dowsett and Allsop JJ referred to Adelaide Milk and continued:

“34 We note also the observations of Ryan J in Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308 as follows:

‘However, it is within the employer's prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to single position and distributing them among the holders of other positions, including newly-created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved. One illustration of it occurs where the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Co-operative case.

“35 Similarly in Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332-333 Beazley J said:

‘There was no dispute that the “operational requirements” of a business may include redundancy. A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed.; or where the employer wishes to amalgamate jobs. … As was said in Bunnetts' case (Bunnett v Henderson's Federal Spring Works Pty Ltd (1989) 31 AILR 354:

“Organisational restructuring may result in a position being abolished and the functions or some of them being given to another or split amongst others.

“36The Macquarie Dictionary (3rd ed, 1997) now relevantly defines ‘redundant’ as meaning:

‘ … denoting or relating to an employee who is or becomes superfluous to the needs of the employer …

“37In the Oxford English Dictionary (2nd ed, 1991) the word is defined relevantly as:

‘The condition of having more staff in an organisation than is necessary. Hence, the state or fact of losing a job because there is no further work to be done; a case of unemployment due to reorganisation, mechanization, loss of orders, etc.

35. Their Honours contrasted the position adopted by the Commissioner and the primary Judge with the approach espoused by the South Australian Full Court in Adelaide Milk, which necessitated “identification of the ‘jobs’ in question”. Their Honours continued:

“41In Jones Ryan J observed that a job involves ‘a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer's organisation, to a particular employee’. We accept that view. Ryan J then observed that where such duties are reassigned, the question is whether any function or duty remains to be performed by the employee. We do not understand his Honour to have meant that if any aspect of the employee's duties is still to be performed by somebody, he or she cannot be redundant. His Honour's meaning appears clearly from the following paragraphs at 308-309:

‘In this case, the respondent led evidence that of the major changes which were made to the Department between September 1993 and late 1994. According to Mr Downie, the applicant's former position as Director, Mining Inspectorate, was abolished and the duties attached to it were combined with those of the previous Director, Environmental Management. In addition to a number of other, newly-created functions, those pre-existing duties were to be performed by a newly created General Manager, Mineral Operations. Thus it is clear that although some of the tasks previously assigned to Mr Jones still had to be carried out, the employer's rearrangement of its operational structure had the consequence that they be combined with other functions and performed by the holder of a new, more generally-oriented position.

On this basis, it appears that Mr Jones' former position was rendered “generally redundant”. When it became apparent that he could not be redeployed, Mr Jones was found to be surplus to the respondent's personnel needs. This amounted to a reason for dismissal which was clearly based on his employer's operational requirements.

“42 As Beazley J observed in Quality Bakers:

‘A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed; or where the employer wishes to amalgamate jobs …

“43 The difficulty in this case has been caused by the aphorism which appears in both paras 12 and 42 of TD 94/12 to the effect that the job, not the employee, becomes redundant. However s 27F speaks of the ‘bona fide redundancy of the taxpayer’. We consider that it is more accurate to say that an employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by any employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant. Reallocation of duties within an organisation will often lead the employer to consider whether an employee, previously employed to perform specific functions assigned to a particular ‘job’, will be able to perform any available ‘job’ existing after such reallocation. Even if the employee's job, defined by reference to its duties, has disappeared, he or she may be able to perform some other available job to the satisfaction of the employer. In that case, no question of redundancy arises. It is only if the employer considers that there is no available job for which the employee is suited, and that he or she must therefore be dismissed, that the question of redundancy arises. If, in good faith, the employer:

has reallocated duties;

considers that the employee is not suitable to perform any available job, defined by reference to those reallocated duties, existing after the re-allocation; and

for that reason, dismisses the employee.

then, for the purposes of s 27F, the employee is dismissed by reason of his or her bona fide redundancy. In the above discussion we have used the word ‘available’ as meaning ‘vacant’, and the word ‘suitable’ as meaning ‘within the employee's capacity’. ”

36. It seems to me that the approach followed in Adelaide Milk has been reflected in the wording of Foster's policy. The critical question is whether through no fault of the employee his or her role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists [footnotes omitted].’

[131] It will be seen that the consistent emphasis emerging from the above citations is on the employer’s prerogative to rearrange the structure of its business by breaking up the functions, duties and responsibilities of a single position and distributing them among the holders of other positions, including newly created ones. In these examples, the work required to be performed does not change, but the means by which the work is organised does change. This scenario is no different to the circumstances of this case. It invites a conclusion that represents a classic redundancy situation.

[132] In Hodgson v Amcor Ltd (2012) 264 FLR 1, Vickery J, after summarising the various authorities, arrived at the following conclusions:

‘In essence, subject to any qualification or re-statement found in the relevant contract of employment or any applicable statute, the common law concept of “redundancy” comes down to the following propositions:

(a) A job becomes redundant when the job of the employee ceases to exist because the employer, for whatever reason, whether by reason of reorganisation, mechanization, change in demand or other reason, no longer desires to have it performed by anyone;

(b) This can occur either when the role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists;

(c) However, redundancy is not limited to the circumstance where the employer, no longer desires to have the work previously performed by the terminated employee done by anyone;

(d) A redundancy may also arise upon the redistribution of job functions, where the duties performed by an employee are redistributed among other employees.In this case the employer still requires the duties to be performed, but the re-organisation may give rise to a redundancy. In this event, although the duties remain to be performed, “for all practical purposes the original role no longer exists” because the duties are divided and assigned amongst others. In such a case the question is whether any function or duty remains to be performed by the employee. A redundancy will occur if, after the reorganisation, the employee in question is left with no duties to discharge;and

(e) Redundancy will not arise where the termination of employment is carried out solely because of any personal act or default of the employee terminated or for any consideration peculiar to that employee [footnotes omitted, emphasis added].’

[133] In Ulan Coal (2), a Full Bench of the Commission held at paras [19]-[20] that:

‘[19] In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the “jobs” of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 non-trades mineworker positions which were surplus to the Company’s requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.

[20] These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise [emphasis added].’

[134] The respondent’s evidence in this case, which was not seriously put in doubt, was that in order to make cost savings in difficult economic circumstances, in which it had lost some major contracts, it had made a decision to reorganise its high cost weekend shifts by outsourcing that work to a contractor. The estimated annual savings was $100,000. While the decision was unfortunate for the affected employees, there can be no doubt that this was an entirely unremarkable cost saving measure which resulted in the redundancy of the applicant. It should be noted that the applicant was not the only employee made redundant at the time. The evidence was that a number of other employees nationwide were also made redundant and all of them were offered and accepted redeployment (bar the applicant). Thus it could not be said that this was some ‘sham’ or ‘phony’ arrangement merely to get rid of the applicant. It was a thoughtfully considered nationwide proposal to restructure its more costly shifts, through outsourcing that work.

[135] Unfortunately, the outsourcing of existing work and the resultant displacement of in house employees is a contemporary phenomenon in many modern workplaces. It is neither unusual or unreasonable, let alone unlawful, as claimed by the applicant. The fact the applicant utterly rejected the respondent’s decision does not alter the correct legal position. His attempts to characterise the respondent’s decision otherwise, including as a ‘sham’ contracting arrangement, demonstrate that he simply does not understand the relevant legislative provisions as to the meaning of ‘genuine redundancy’.

[136] Further, the applicant’s misapplication and/or misconstruing of legal principles is no better demonstrated than by his claim that the employer could not alter, in any way, his terms and conditions of employment or terminate his contract, without his consent. If that was the case, no employee would ever be dismissed for poor performance, misconduct, redundancy or, indeed, any reason. This is a nonsense proposition.

Consultation with the employee and redeployment

[137] There is, of course, a second leg to the Act’s definition of ‘genuine redundancy’. The applicant claimed that he had not been properly consulted about his redundancy and that the respondent had alternative positions which could be performed by him, but were not offered to him. I cannot agree.

[138] In Ulan Coal (2), the Full Bench held that employees and their representatives should be involved in the problems associated with redundancy as soon as a firm decision has been taken that redundancies might be necessary. At para [27], the Full Bench said:

‘[28] Sub-clause 23.1 is in somewhat similar terms to the consultation provisions determined in the TCR Cases. It is clear that the intention in those cases is that the employees and their representatives should be involved in the problems of redundancy as soon as a firm decision has been taken that retrenchments might be necessary (see TCR Case [1984] 8 IR 34, at 62-64). This intention can also be discerned from the wording of sub-clause 23.1 of the Agreement itself. The requirement is for discussions to begin “as soon as is practicable” after a definite decision is made about redundancies. The decision is described in the sub-clause as one which “may” lead to termination of employment (par 23.1(1)) and the discussions to be held will include consideration of the reasons for “proposed terminations” and measures to “avoid or minimise the terminations” (par 23.1(2)). The discussions as such will be of relevance to the entire workforce of an enterprise or at least to that part of the workforce whose work or jobs will be affected by terminations due to redundancy. In the present case, this would be the mineworker employees at the mine. These are the employees “directly affected” by the decision to change the size and composition of the mineworker workforce at the mine and the group with whom the Company must hold discussions. The discussions are envisaged to take place before the number of terminations is finalised and the particular employees to be retrenched are identified.’

Despite the applicant’s view, it must be stressed that consultation does not mean agreement.

[139] Within this context, the evidence in this case disclosed the following:

(a) The applicant was advised informally, by phone on 23 July 2014 by Mr Thomson of the nationwide restructure. The applicant swore at him and hung up;

(b) Mr Thomson followed up the phone call by letter the same day, which:

(i) advised him of the fourteen day consultation period;

(ii) invited the applicant’s input into the proposal and the effects it might have on him;

(iii) informed him of the background to the decision broadly;

(iv) broadly advised of redeployment options; and

(v) offered a personal, confidential consultation.

(c) Mr Thomson spoke by phone to the applicant again on 25 July 2014. The applicant told him that his contract could not be changed, without his agreement;

(d) Mr Thomson emailed the applicant to arrange a consultation meeting;

(e) The applicant refused to attend any meetings and insisted on all communications being in writing;

(f) On 31 July 2014, Mr Thomson offered two redeployment options to the applicant:

(i) a full time weekly day shift roster (76 hours a fortnight) at $2,153.65 per fortnight; and

(ii) a part time week day shift roster (46 hours a fortnight) at $930.38.

(g) Both options were in the same geographic location, had the same duties and base rate of pay. There would be no loss of seniority;

(h) The applicant refused to accept any option which was not a weekend shift roster;

(i) The applicant’s previous weekend roster was 46 hours a fortnight with him earning $1,568.

(j) Since the conciliation of this matter, the applicant has been offered a permanent part time roster and casual mid week night shift and day shift rosters. All of these offers were rejected by the applicant.

[140] Two recent Full Bench decisions expressed the obligations on the employer in respect to redeployment as follows. In Ulan Coal Mines Limited v Honeysett and others[2010] FWAFB 7578, the Bench said:

‘[27] Secondly, it is implicit in the terms of s.389(2)(b) that it might be reasonable for an employee dismissed by one employer to be redeployed within the establishment of another employer which is an entity associated with the first employer. It follows that an employer cannot succeed in a submission that redeployment would not have been reasonable merely because it would have involved redeployment to an associated entity. Whether such redeployment would have been reasonable will depend on the circumstances. The degree of managerial integration between the different entities is likely to be a relevant consideration.

[28] Thirdly, the question posed by s.389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.

...

[30] In relation to its appeal, and leaving aside the issues of construction we have already dealt with, Ulan submitted that the Commissioner’s decision was wrong because he did not identify the particular positions in a particular enterprise to which each of the six applicants could have been redeployed. He also erred in not taking into account the failure of the employees to pursue job opportunities with the related entities after Ulan had publicised those vacancies. The Commissioner was influenced in this regard by the fact that the employees would have been competing for positions rather than being given some kind of preference. Further, it was submitted that the evidence indicated that the evidence given by four of the applicants did not indicate that at the relevant time they were interested in and ready and willing to take employment away from Mudgee.

[31] The Commissioner found that entities associated with Ulan had vacancies for jobs which were potentially suitable for the dismissed employees and there was no evidence that redeployment from Ulan to the mines operated by these associated enterprises would have any impact on operational efficiency. While the Commissioner decided that some of the employees dismissed by Ulan were encouraged to apply for vacancies at mines operated by associated entities, he also found that neither Xstrata nor its associated entities had a policy of employing persons who might be redundant in other enterprises in the group. In Xstrata’s case, this is despite the fact that it had overall managerial control in relation to the mining operations of the associated entities. These findings were open to him. The Commissioner also found no evidence that any of the relevant employees would have been unwilling to be redeployed to one of the other mines. It must be said that all of the evidence was not one way on this issue and, as Ulan’s submissions indicate, some of the employees in particular did not display a great deal of energy in following up on vacancies which Ulan brought to their attention. Nevertheless we think it was open to the Commissioner to find that if offered redeployment they would have accepted it.

...

[34] It may be appropriate to make some concluding remarks about the operation of s.389(2). It is an essential part of the concept of redeployment under s.389(2)(a) that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard. The outcome of that application would depend upon a number of other considerations.

[35] Where an employer is part of a group of associated entities which are all subject to overall managerial control by one member of the group, similar considerations are relevant. This seems to us to be a necessary implication arising from the terms of s.389(2)(b). While each case will depend on what would have been reasonable in the circumstances, subjecting a redundant employee to a competitive process for an advertised vacancy in an associated entity may lead to the conclusion that the employee was not genuinely redundant.’

[141] In Technical and Further Education Commission T/A TAFE NSW v Pykett [2014] FWCFB 714 (‘Pykett’), a Full Bench of this Commission held:

‘[36] We have earlier set out the submissions of the appellant and the respondent as to the proper construction of s.389(2) (see paragraphs [15] to [18] above). We accept the respondent’s submissions. For the purposes of s.389(2) the Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must also be an appropriate evidentiary basis for such a finding. Such an interpretation is consistent with the ordinary and natural meaning of the words in the subsection; the Explanatory Memorandum and Full Bench authority. We acknowledge that the facts relevant to such a finding will usually be peculiarly within the knowledge of the employer respondent, not the dismissed employee. If an employer wishes to rely on the ‘genuine redundancy’ exclusion then it would ordinarily be expected to adduce evidence as to the following matters:

(i) that the employer no longer required the dismissed employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;

(ii) whether there was any obligation in an applicable modern award or enterprise agreement to consult about the redundancy and whether the employer complied with that obligation; and

(iii) whether there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employer.’

[142] Given the lengths the respondent went to discuss redeployment options with the applicant, explain the basis for its decision to outsource its weekend work and his refusal to even accept his position as being redundant (let alone agree to any redeployment options), I am satisfied that the respondent has complied with its obligations to consult the applicant about his redundancy. The applicant criticised the length of the consultation period as too short. However, as he would not even meet with the respondent until the last meeting and described the process as ‘manipulated’ and ‘calculated’, such a submission is disingenuous. If an employee refuses to cooperate with the process, he/she is hardly in any position to criticise it.

[143] The facts were he would not accept any redeployment option because he claimed he was not redundant, the employer could not alter his contract without his consent and he would not work any other shifts than those on the weekend. Given this intransigence, the respondent could not agree to the applicant’s proposal without defeating the very purpose for which the decision had been made in the first place to outsource its most costly weekend work. At no time did the applicant inform the respondent (or the Commission) why he could not work at any other time than on the weekend, other than he had done so for nine years and it was ‘comfortable’ for him.

[144] For completeness, I am satisfied that the respondent’s job offers were suitable, reasonable alternative positions and the applicant was unreasonable in refusing to accept at least one of them. The fact that all of the other redundant employees nationwide had accepted redeployment is testimony to the fact that the respondent was serious about minimising the impact of its restructuring and was successful in obtaining alternative jobs for all those affected. There is nothing more the respondent could have done to fulfil its obligations under ss 389(1) and (2) of the Act.

Practicality of reinstatement

[145] The only remedies the applicant sought was reinstatement and backpay. Even if I had come to that point in the case, in my view, reinstatement of the applicant would be completely impractical. Given the evidence in this case, that the applicant:

a) accused Mr Thomson of ‘auditing’ his phone calls;

b) refused to have ‘face to face’ meetings with the respondent; and

c) insisted all communications with him being in writing;

it is difficult to see how any trust and confidence could be restored to the employment relationship to justify his reinstatement. However, I need take this matter no further.

CONCLUSION

[146] For the aforementioned reasons, I am satisfied the applicant’s dismissal was a case of ‘genuine redundancy’ within the meaning of s 389 of the Act. The applicant was not unfairly dismissed. Accordingly, there is no jurisdiction for the Commission to determine this application for an unfair dismissal remedy. The application must be dismissed. An order to that effect will be published contemporaneously with this decision.

DEPUTY PRESIDENT

Appearances:

Applicant in person.

Mr S Gorval for the respondent.

Hearing details:

2015:

Brisbane.

21, 22 January

Final written submissions:

Applicant: 28 January 2015

Respondent: 6 February 2015

Printed by authority of the Commonwealth Government Printer

Dominic Fitzjohn v Southern Cross Protection Pty Ltd

[2015] FWC 2601

15 APRIL 2015

DECISION

INTRODUCTION

THE EVIDENCE

For the respondent

Mr Vishal Arora

Mr David Medhurst

SUBMISSIONS

For the respondent

For the applicant

CONSIDERATION

Meaning of redundancy

Consultation with the employee and redeployment

Practicality of reinstatement

CONCLUSION