Dominic Jack v Urban Climb Pty Ltd
[2012] FWA 6916
•19 OCTOBER 2012
[2012] FWA 6916 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Dominic Jack
v
Urban Climb Pty Ltd
(U2012/1092)
COMMISSIONER ROBERTS | SYDNEY, 19 OCTOBER 2012 |
Application for unfair dismissal remedy - jurisdiction - whether termination was a genuine redundancy.
[1] This decision concerns an application lodged on 11 May 2012 by Mr Jack pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the alleged unfair termination of his employment by Urban Climb Pty Ltd (Urban Climb or the Company). The application was dealt with by a Fair Work Australia Conciliator on 1 June 2012 but the conciliation was unsuccessful.
[2] A jurisdictional objection was raised by the Company arguing that the dismissal was for genuine redundancy. The matter was set down for jurisdiction and arbitration hearing in Brisbane on 23 August 2012. Directions were issued for the filing of written submissions, witness statements and any supporting documents. That process was completed on or about 6 August 2012.
[3] At the hearing Mr Jack represented himself and Urban Climb was represented by Ms B Hughes of Bruce Thomas Lawyers. Mr Jack gave sworn evidence and Mr A Cox-Taylor (a Director of Urban Climb) gave sworn evidence for the Company.
Background
[4] Urban Climb operates an indoor rock climbing facility. Mr Jack was employed by the Company as a casual floor instructor from September 2005 until his employment was terminated with effect from 11 May 2012. According to Urban Climb, the termination of Mr Jack’s employment was a genuine redundancy due to operational changes in the business. Mr Jack maintains that the termination was an adverse action taken against him after he made a complaint with Fair Work Ombudsman about wage rates. Urban Climb claims that if the termination of Mr Jack’s employment was the result of a genuine redundancy then the Tribunal is jurisdictionally barred from further consideration of Mr Jack’s substantive application for relief.
Legislative Framework
[5] Sections 385 and 389 of the Act provide:
“385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
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.”
[6] The Explanatory Memorandum to the Fair Work Bill 2008 (Explanatory Memorandum) provides to state the meaning of genuine redundancy as follows:
- 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.
“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:
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 a 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.”
[7] The modern award which applies to Mr Jack’s employment is the Fitness Industry Award 2010 (the Award).
[8] Clause 8 of the Award provides:
“8. Consultation regarding major workplace change
8.1 Employer to notify
(a) 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.
(b) 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.
8.2 Employer to discuss change
(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1, 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.
(b) 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.
(c) 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.”
[9] Clause 15 (Redundancy) of the Award does not apply to Mr Jack as he was a casual employee.
Conclusions and finding
[10] It is clear from the provisions of s.389 that a genuine redundancy could only have occurred if Urban Climb had complied with the consultation obligations contained in clause 8 of the Award. The Explanatory Memorandum makes this point also at s.1550.
[11] In UES (Int’l) Pty Ltd v Harvey 1(Harvey), the majority of the Full Bench found that a dismissal was not a case of genuine redundancy within the meaning of s.389 because the company had not consulted about the redundancy in accordance with its obligation in the applicable modern award.2
[12] In Maswan v Escada Textilvertrieb T/A ESCADA 3 (Escada), Vice President Watson said: “The failure to notify and consult with Mr Maswan in accordance with the award is a serious defect in the procedure.”4 His Honour went on to say: “The failure to consult is not a trivial matter.”5 Subsequent case law has been consistent with Harvey and Escada.
[13] In the case before me, Urban Climb conceded that no consultation occurred between the Company and Mr Jack and the provisions in the Award were not followed 6. The Company has invited me to form the conclusion that the dismissal of Mr Jack was the result of a genuine redundancy albeit attended by procedural flaws. The Company further submits that should I find that the termination was not as a result of a genuine redundancy, I should allow the Company to put further argument in relation to ‘valid reason’ and ‘harsh’, ‘unjust’ and ‘unreasonable’ considerations.
[14] Given the requirement that the consultation provisions in the Award be followed before a dismissal can be considered to be as the result of a genuine redundancy, and the Company’s concession that no such consultation occurred, I find that the termination of Mr Jack’s employment was not a case of genuine redundancy. Urban Climb’s jurisdictional objection is therefore dismissed.
[15] This does not mean that it automatically follows that there was no valid reason for Mr Jack’s employment on operational grounds or that the termination was harsh, unjust or unreasonable.
[16] After consideration, I have decided to grant Urban Climb’s request to be heard further on the questions of valid reason and harsh, unjust and unreasonable. The Tribunal will be in touch with the parties in this regard.
[17] Another option available to the parties is further conciliation before another Member of the Tribunal in Brisbane as a possible avenue of dealing with this matter without the need for further litigation.
COMMISSIONER
Appearances:
D Jack, the Applicant.
B Hughes for Urban Climb Pty Ltd.
Hearing details:
2012.
Brisbane:
23 August.
1 [2012] FWAFB 5241 per Senior Deputy President Acton, Senior Deputy President K
2 Ibid at para 40.
3 [2011] FWA 4239.
4 Ibid at para 37.
5 Ibid at para 39.
6 See Transcript PNs539, 553, 555, 558 and 559.
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