Doris Haberfehiner v GVK NSW Reo Pty Limited T/A GVK Group
[2019] FWC 3434
•17 MAY 2019
| [2019] FWC 3434 |
| FAIR WORK COMMISSION |
EX-TEMPORE DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Doris Haberfehiner
v
GVK NSW Reo Pty Limited T/A GVK Group
(U2019/1620)
DEPUTY PRESIDENT BULL | SYDNEY, 17 MAY 2019 |
Application for relief from unfair dismissal, consultation obligations under enterprise agreement, failure to consult in writing, genuine redundancy, compensation awarded
[1] This decision was issued in transcript and a published version edited for style and clarity is now issued. 1
Introduction
[2] Ms Doris Haberfehiner was employed by GVK NSW Reo Pty Ltd T/A GVK Group (respondent) as a steel fixer having resumed work in November 2018 from a period of absence due to a non-work related injury. Although it appears the applicant knew that redundancies were occurring at the workplace it wasn’t until she was notified by text message on 5 February 2019 by the respondent’s Project Manager that she was to be made redundant effective immediately.
[3] Ms Haberfehiner subsequently made an application under s.394(1) of the Fair Work Act 2009 (the Act) for an order granting a remedy on the basis her dismissal was unfair.
[4] The respondent GVK Group filed an objection to the unfair dismissal application on the ground that the dismissal of the applicant was a case of genuine redundancy. This is disputed by the applicant.
Legislation
[5] Section 394(1) of the Act provides that a person who has been dismissed may apply to the Fair Work Commission (the Commission) for an Order under Division 4 granting a remedy for unfair dismissal.
[6] Section 385 of the Act provides as follows:
“s.385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
(My emphasis)
[7] Section 396 of the Act requires that before considering the merits of an application for an unfair dismissal remedy, the Commission must decide a number of threshold issues:
“s.396 Initial matters to be considered before merits
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;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.”
(My emphasis)
[8] The effect of s.396(d) of the Act is that if a dismissal is the result of a genuine redundancy, the Commission need not determine whether the dismissal was harsh, unjust or unreasonable. 2 As stated the respondent submits that the applicant’s termination of employment was based on the ground of a genuine redundancy.
Genuine Redundancy
[9] Section 389 of the Act sets out the meaning of genuine redundancy, which by reason of s.389(1)(b) and s.389(2) is not restricted to whether an employee’s job is no longer required:
“389(1) Aperson’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.
389(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer”
[10] The Explanatory Memorandum to the Fair Work Bill 2008 states the following in respect of s.389 at Item 1553:
“Clause 389 – Meaning of genuine redundancy
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.”
(Underlining added)
[11] In the Full Bench decision of UES (In’t) Pty Ltd v Leevan Harvey 3 (UES) the majority stated:
“[27] The terms of s.389 of the FW Act suggest the process for selecting individual employees for redundancy is not relevant to whether a dismissal was a case of genuine redundancy. The relevant Explanatory Memorandum confirms as much. Setting aside jurisdictional pre-requisites and the matters in s.396(a) to (c), FWA only needs to consider s.387(a) concerning whether there was a valid reason for a person’s dismissal related to the person’s capacity or conduct if one or more of the criteria in s.389 of the FW Act, which sets out the meaning of genuine redundancy, have not been met. The criteria in s.389 which have not been met can be taken into account in FWA’s consideration as to whether the dismissal was harsh, unjust or unreasonable as part of s.387(h), being “any other matters that FWA considers relevant”.1
[12] The majority decision in UES was applied by the Full Bench in Ventyx Pty Ltd v Mr Paul Murray 4
[13] In Tebikenibeu Low v Menzies Property Services Pty Ltd5 Hatcher VP opined:
“[16] It is not the function of the Commission, in determining whether a dismissal is a case of genuine redundancy, to form a view about the merits of the decision to make a position redundant. Whether it was objectively fair or justifiable to decide to abolish a position is beside the point, as long as the employer acted as it did because of changes in its operational requirements.”
[14] Having regard to the above authorities I will consider the matters in s.389.
Was Ms Haberfehiner’s position no longer required s.389(1)(a)
[15] Mr Rejhan Tahiri the respondent’s Project Manager gave evidence that with Parramatta Stadium and Lachlan’s Line North Ride projects nearing completion the respondent was not successful in securing new projects as anticipated. A Barangaroo project known as Sydney Harbour One was not won and only half of a project known as Edmondson Town at Edmondson Park was won. Other projects have been delayed.
[16] As a result of this situation, since mid-January 2019 the respondent started to downsize its workforce. When the applicant was made redundant on 5 February 2019, three other employees were also made redundant. According to Mr Tahiri’s evidence two weeks earlier five employees were also made redundant. Ms Haberfehiner was selected for redundancy over other remaining employees who Mr Tahiri described as having a better work history at the time. 6
[17] To date Mr Tahiri stated that 35 employees had been made redundant by the respondent with 140 employees still in work.
[18] It was not seriously contested by the applicant that there was a downtown in work for the respondent and that redundancies were necessary. The applicant’s argument centred primarily on the lack of notice and consultation and the reason as to why she was chosen to be made redundant, making the dismissal unfair.
[19] On the evidence of Mr Tahiri I am satisfied that the respondent no longer required the applicant’s position to be performed because of changes in the operational requirements of its business. This aspect of s.389 is therefore satisfied
Compliance with obligation in enterprise agreement to consult about the redundancy s.389(1)(b)
[20] The respondent must also have complied with any obligations under an applicable enterprise agreement to consult about the redundancies for its jurisdictional defence to succeed. It is accepted the applicant and respondent are covered by an enterprise agreement approved by the Fair Work Commission known as the GVK NSW Reo Pty Ltd / CFMEU Collective Agreement 2017-2018. The consultation obligations in respect to redundancy under the Agreement are found at clauses13.2 Redundancy and 32.1 Consultation regarding major workplace changes:
“13.2 Redundancy
a) The parties agree that in the spirit of this Agreement, termination of employment will be consistent with the objectives and goals of the Company and the workforce. Termination of employment shall be decided on, but not limited to, issues such as skills and ability, diligence, experience, length of service with the Company and anticipated skills and future labour requirements. Employees will be consulted and advised in respect of what criteria is used to determine redundancies prior to making Employees redundant.
b) When redundancies are deemed necessary there will be appropriate consultation with the workforce and where relevant the Union delegate(s)/employee representative(s) and Company Consultative Committee prior to redundancies taking place. The Company should wherever possible seek voluntary redundancies.
c) The Company will ensure that selection of Employees will be done fairly and in accordance with the established criteria.
d) Where the need for redundancies is disputed, the dispute resolution clause will apply.”
[21] Further at clause 32 of the Agreement the following consultation obligations are set out:
“32.1 Consultation regarding major workplace change
(a) Where the Company is seriously considering, and prior to the taking of any definite decision on, the introduction of major workplace changes that are likely to have a significant effect on Employees, the Company must notify and consult with the affected Employees, or their nominated representative/s (e.g. Union or other representative).
(b) The Company must recognise the representative appointed by an Employee (if any), and consult in good faith in relation to such proposed changes, including by representing Employees during consultation regarding the proposed changes. For the purpose of this consultation, the Company will invite any nominated representative/s (e.g. Union or other representative) to attend the consultations under this clause. Such consultation will occur off site (also noting that this does not confer a general right to enter site to hold discussions with Employees).
(c) For the purposes of the discussion the Company will provide the relevant Employees and/or their nominated representative/s in writing:
(i) All relevant information about the change including the nature of the change proposed;
(ii) Information about the expected effects of the change on the Employees; and
(iii) Any other matters likely to affect the Employees.
(b) 7 However, the Company is not required to disclose confidential or commercially sensitive information.
(c) The Company must give prompt and genuine consideration to matters raised about the major change by the relevant Employees.
(d) "Significant Effects" under this clause include termination of employment (including redundancy), 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 areas or locations and the restructuring of jobs.”
(My underline)
[22] Mr Tahiri concedes that the respondent has not followed the consultation requirements of the Agreement in respect of the applicant’s redundancy. He states he was confused about the requirements which he believed only applied to discussions with the relevant union. It was not common practice for the employer to consult directly with employees as opposed to speaking to union delegates. Section 389(1)(b) of the Act has not been met by the respondent.
S.389 (2) Redeployment
[23] Section 389(2) also requires the Commission to be satisfied that it would not have been reasonable for the applicant to have been redeployed within the employer’s enterprise or that of an associated entity of the employer, if the defence of genuine redundancy is to be made out.
[24] This issue was not raised by either party and I conclude on the evidence available that it would not have been reasonable to redeploy the applicant in the circumstances which existed at the time within the employer’s enterprise or that of an associated entity of the employer.
[25] However as the employer has not complied with the Agreement’s consultative provisions and hence has not complied with s.389(1)(b) of the Act, the defence to the unfair dismissal claim of there being a genuine redundancy under s.389 of the Act cannot succeed.
[26] The application then turns to be dealt with under the criteria set out at s.387 of the Act for consideration as to whether the dismissal was harsh, unjust or unreasonable. Section 387 is as follows:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
Was there a valid reason related to capacity or conduct for the dismissal?
[27] In this matter I am satisfied the respondent no longer required the applicant’s job to be performed by anyone because of changes in the operational requirements of the enterprise. Accordingly, the reason for dismissal did not relate to the applicant’s capacity or conduct. The applicant submitted that the reason she was chosen for redundancy over others was unfair, although her evidence did not indicate what employee/s should have been chosen in lieu of her or that she would not have been fairly selected for redundancy at a later date.
[28] In UES8 the Full Bench examined the application of s.387(a) and the majority held that a termination through redundancy was not relevant to the Commission’s consideration under s.387(a):
(26) We have concluded, however, that s.387(a) of the FW Act regarding the matter of whether there was a valid reason for the dismissal related to the person’s capacity or conduct does not go to the process for selecting the person for redundancy.
[29] Accordingly, there was not a dismissal relating to her capacity or conduct as such this is not a factor of relevance with respect to whether the applicant’s dismissal was harsh, unjust or unreasonable.
Whether the person was notified of that reason and given an opportunity to respond to any reason related to the capacity or conduct
[30] The matters in s.387(b) and (c) of the Act deal with whether there was procedural fairness in respect of a reason for dismissal related to Ms Haberfehiner’s capacity or conduct. While Ms Haberfehiner was made redundant she was not provided an opportunity to discuss her redundancy. However given the evidence of Mr Tahiri it seems unlikely that the respondent’s position would have altered after the consultation process had concluded and Ms Haberfehiner’s redundancy would still have proceeded.
[31] As stated above, the applicant’s termination of employment did not directly relate to her capacity or conduct. As Mr Tahiri stated in a text message to the applicant on 5 February 2019, at around 5:50 pm “the reason is that we are slowing down with works.” Had the applicant’s position not been deemed redundant the issue of her performance or conduct would not have arisen.
Any unreasonable refusal to allow a support person present to assist at any discussions relating to dismissal
[32] The opportunity for Ms Haberfehiner to have a support person present to assist at any discussions relating to her redundancy did not arise. Mr Tahiri states that the applicant was not at the worksite at the relevant times as she had been absent from work and no discussions could take place.
If the dismissal related to unsatisfactory performance whether the person had been warned about that unsatisfactory performance before the dismissal
[33] The redundancy did not relate to unsatisfactory performance.
The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;
[34] At the time of the applicant’s redundancy the respondent had some 165 full time employees 9 Mr Tahiri’s evidence was that the respondent has a human resource personnel. On this basis it would be expected that the redundancy process would have been undertaken in a manner reflecting this specialist expertise. There was no evidence that any human resource employees were involved in the redundancy process or provided any guidance to Mr Tahiri as to the respondent’s Agreement redundancy consultation obligations. In any event they were not followed.
Any other relevant matters
[35] I have considered all of the evidence and have found that the position occupied by the applicant was redundant.
[36] The Agreement requirement to provide an employee with information about the redundancy and its effect is no mere procedural formality but is part of the substance of the consultation process. Failure to do so is not a minor technical breach. When told about her redundancy the applicant objected. The requirement to provide all relevant information in writing at clause 32.1(c) of the Agreement allows an employee to consider all that has been put by the employer and to then respond, upon which the employer is then to give prompt and genuine consideration to matters raised by the employee.
[37] The failure to provide the applicant with the consultation discussions and processes including written advice regarding her redundancy as required by the Agreement has in the circumstances caused unfairness to the extent that the failure to consult made the dismissal unreasonable and therefore unfair.
[38] Section 390 of the Act sets out when the Commission may order a remedy for an unfair dismissal as follows:
“390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWC may make the order only if the person has made an application under section 394.
(3) FWC must not order the payment of compensation to the person unless:
(a) FWC is satisfied that reinstatement of the person is inappropriate; and
(b) FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[39] Ms Haberfehiner stated that since 26 March 2019 she had obtained casual employment as a steel fixer with another employer and that she was currently looking for work elsewhere.
[40] A failure to comply with consultation requirements under an enterprise agreement in cases of redundancy would not ordinarily warrant an order for reinstatement and I do not consider it appropriate in this case, however I consider an order for compensation is appropriate in this case.
[41] Section 392 of the Act sets out matters relevant to an order for compensation as follows:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), FWA must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that FWA considers relevant.
Misconduct reduces amount
(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by FWA to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by FWA to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(c) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
Remuneration that would have been received (s.392(2)(c))
[42] Taking into consideration that the nature of the employer’s industry is construction work I assess that one week would be the period it would have taken the respondent to comply with its obligations in the Agreement to consult with Ms Haberfehiner about her redundancy and to consider and respond to any issues that she may have raised. In the immediate period after her dismissal Ms Haberfehiner was without work.
[43] One weeks’ remuneration for Ms Haberfehiner is on the evidence of the parties six day’s work for which the applicant was paid a gross amount of $2,327.00.
[44] There is no reason to deduct any amount from this amount other than to make it subject to being taxed according to law and that the statutory amount of superannuation is also paid on this amount by the respondent.
[45] There was no evidence that an order for one week’s wage plus superannuation would affect the viability of the respondent.
[46] There are no other relevant matters under the Act to take into account in the determination of the amount of compensation
Conclusion
[47] An order for the payment by the respondent of compensation of $2,327.00 gross, plus superannuation, less taxation as required by law, to the applicant is appropriate in all the circumstances.
[48] An order to this effect will issue.
DEPUTY PRESIDENT
Appearances:
Ms N Miller on behalf of the applicant.
Mr R Tahiri on behalf of the respondent.
Hearing details:
2019.
Sydney,
May 16.
Printed by authority of the Commonwealth Government Printer
<PR708435>
1 See extra curial publication (1997) 9 Judicial Officers’ Bulletin Gleeson CJ at 25
2 UES (Int’L) Pty Ltd v Harvey[2012] FWAFB 5241
3 [2012] FWAFB 5241
4 [2014] FWCFB 2143 at [102 - 106]
5 [2014] FWC 7829
6 Witness statement Exhibit R1
7 Note: Agreement numbering is out of sequence
8 [2012] FWAFB 5241
9 Q, 1.7 of F17
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