[2017] FWC 3870

FAIR WORK COMMISSION

DECISION

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

Enzo Cepile
v
Hyne Timber Pty Ltd
(U2017/1504)

COMMISSIONER JOHNS

SYDNEY, 29 AUGUST 2017

Application for unfair dismissal remedy – genuine redundancy.

Introduction

[1] On 13 February 2017 Enzo Cepile (Applicant) made an application to the Fair Work Commission (Commission) pursuant to section 394 of the Fair Work Act 2009 (FW Act) for a remedy in respect of his dismissal by Hyne Timber Pty Ltd (Respondent/Employer/Hyne Timber).
[2] On 16 March 2017 the Respondent filed a response to the unfair dismissal application. It objected to the Commission exercising jurisdiction in relation to the unfair dismissal application on the basis that, it submitted, the dismissal was a case of genuine redundancy.
[3] Conciliation was attempted, but the matter remained unresolved.
[4] Consequently the matter was listed for a Jurisdictional hearing on 2 and 15 June 2017.
[5] At the hearing;

a) the Applicant was represented by Mr Malbasa from the Construction, Forestry, Mining and Energy Union (CFMEU). The Applicant gave evidence on his own behalf and was cross-examined.
b) the Respondent was represented by Mr Swan from the Australian Industry Group. Mr Adrian Paalvast, the Tumbarumba Site Manager of the Tumbarumba Sawmill, was called to give evidence for the Respondent and was cross-examined.

[6] In advance of the hearing the parties filed materials. In coming to this decision the Commission, as presently constituted, has had regard to the following documents in addition to the oral evidence and other documents tendered during the hearing:

EXHIBIT NO.	DESCRIPTION	TRANSCRIPT REFERENCE
A1	Applicant’s Outline of Submissions dated 20 April 2017	PN 9
A2	Witness Statement of Mr Cepile dated 20 April 2017	PN 10
A3	Supplementary Witness Statement of Mr Cepile dated 23 May 2017	PN 13
A4	Email from CFMEU with attached pay record details	PN 554
A5	Bundle of Job Advertisements	PN 631
R1	Respondent’s Outline of Submissions dated 15 May 2017	PN 20
R2	Witness Statement of Mr Adrian Paalvast dated 15 May 2017	PN 21
R3	Email from Mr Swan dated 9 June 2017 (plus attachments)	PN 556
R4	Unredacted copy of DM Employee Functional Data Document	PN 559
R5	Email dated 14 June 2017 (plus attachments)	PN 582
R6	Confidential email dated 14 June 2017	PN 585

[7] On 23 June 2017 the parties filed supplementary submissions. The Commission has also had regard to those submissions in coming to this decision.

Background

[8] The following matters were either agreed between the parties or not otherwise substantially contested:

a) The Respondent employs more than 500 employees, with approximately 170 being employed at the Tumbarumba Mill.
b) The Applicant commenced employment with the Respondent on 14 August 2008.
c) The Applicant’s employment was covered by the Hyne Timber Tumbarumba Enterprise Agreement 2015 (Agreement).

d) Up until late 2012 the Applicant worked in the Dry Mill as a Process Operator.

e) On 13 August 2013 1 the Applicant was transferred to the Green Mill as Systems Coordinator. However, from time to time he worked in the Dry Mill when the Green Mill was not operating. He did so on at least 5 occasions in 2016.2

f) Ms Maureen Dowell performed a Systems Coordinator role in the Dry Mill.

g) From around August 2016 the Respondent commenced a program of process improvements. The Commission was provided with a list of 29 initiatives.
h) Around November 2016 initiative #124 was designed. It was titled “Org Redesign – Tumba Support Services (phase 1 and 2)”. This was to occur in the production business unit. It had a commencement date of 3 November 2016 and end date of 1 July 2017. 3 The intent of the initiative was:

i. Phase 1 – consolidate 4 support services roles into 2 (by March 2017), so that there as 1 x site trainer and 1 x site inventory reconciler.
ii. Phase 2 – further consolidate the remaining 2 roles into 1 (by July 2017), eliminating 1 x FTE site reconciler role.

Initiative #124 noted that,

• The Dry Mill has a full time person administering training (Ms Dowell), another on reconciliation and another doing admin functions,
• The Green Mill has a full time person who splits his time between training and reconciliations and some administrative functions (this is the Applicant).

i) In around mid-January 2017 the final decision was made to combine Ms Dowell’s role with that of the Applicant so that there was site trainer role (rather than one for both the Dry Mill and the Green Mill). In attendance at the meeting was Mr Paalvast, Mr Miljana (Operations Manager) and Mr Kelly (Support Manager). 4
j) On or around 25 January 2017 Mr Paalvast decided to instal Ms Dowell into the site trainer role. The Applicant was not provided with an opportunity to compete for the combined role. Mr Paalvast said he held concerns about the way the training role was being performed in the Green Mill. However, he never discussed those issues with the Applicant. 5
k) The decision to combine Ms Dowell’s role with that of the Applicant impacted upon both of them and also other supervisors. 6
l) On Friday, 27 January 2017 the Applicant, met with the Respondent’s Tumbarumba Site Manager, Adrian Paalvast. The Applicant,

i. was advised by the Respondent that his position would be made redundant,
ii. was offered,

A. a severance package (with effect from 3 February 2017), or
B. the option of applying for a Process Operator position in the Dry Mill (subject to a medical clearance).

iii. The Applicant was given until midday, Wednesday, 1 February 2017 (i.e. 2 business days later) to inform the Respondent of his decision.

m) On 30 January 2017 the Applicant, his union representative and the Respondent met.

n) On 1 February 2017:

i. Mr Paalvast asked the Applicant which option he wanted. The Applicant told him his union would be responding on his behalf.
ii. the CFMEU wrote to the Respondent reminding it of its consultation obligations under the Agreement. It asked that the Applicant’s employment not be made redundant until further talks regarding the redundancy had taken place (CFMEU Letter).

o) On 6 February 2017 the Applicant attended a functional assessment test for the Process Operator position. In summary the Applicant did not pass the functional assessment test. The results included the following: 7

Measure	Applicant’s score	Respondent’s requirement
Cardio fitness	Good	Good or higher
AROM	Yes	No restrictions
Hand grip	Below	Both hands “within”
Manual dexterity	Reduced	All yes
Balance	Reduced	All yes
Back fitness	Good/fair	Excellent
Lower limb functioning	Restricted	All yes
Fitness work Cap	Good	Able – no restrictions
Kg floor to waist	18	17.5
Kg floor to shoulder	18	17.5
Kg at waist 60 sec	18	17.5
Ave	18	17.5
Overall	Below average	Above average

p) The Applicant was not provided with an opportunity to comment on the functional assessment results. The Respondent gave no consideration to what reasonable accommodations (if any) could be put in place to assist the Applicant to perform the Process Operator role.

q) On 10 February 2017:

i. the Applicant met with Mr Paalvast who informed him that he had not passed the Process Operator functional assessment test.
ii. the Applicant was handed a letter of termination on the basis that his position had been made redundant.
iii. the Respondent wrote to the CFMEU Letter stating that the consultation obligations outlined in the Agreement were not applicable in the circumstances, and if they were applicable, the Respondent had met its obligations under the Agreement.
iv. the Applicant was made redundant effective immediately. He was paid 1,155.58 hours redundancy pay.

r) The Applicant is 60 years of age. He was unemployed from 10 February 2017 – late May 2017. He then secured some part-time employment as a traffic controller.

[9] The Applicant submitted that he was unfairly dismissed and sought an Order that he be reinstated or, if reinstatement was not deemed an appropriate remedy, the Applicant sought an Order for compensation.

Protection from Unfair Dismissal

[10] An order for reinstatement or compensation may only be issued where the Commission is satisfied the Applicant was protected from unfair dismissal at the time of the dismissal. Section 382 of the FW Act sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal and, in the present matter, the Respondent does not submit that the Applicant was not protected.
[11] There being no dispute, the Commission, as presently constituted, is satisfied the Applicant has completed the minimum employment period and earned less than the high income threshold. Consequently, the Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal.
[12] I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the FW Act.

Was the dismissal unfair?

[13] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s.385 of the FW Act existed. Section 385 provides the following:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

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

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

Was the Applicant dismissed?

[14] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the FW Act. Section 386 of the FW Act sets out the meaning of “dismissed”. In the present matter the Respondent concedes that it dismissed the Applicant. 8
[15] Consequently, the Commission, as presently constituted, finds that the Applicant was dismissed from his employment with the Respondent within the meaning of s.386 of the FW Act.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[16] A person has not been unfairly dismissed where the dismissal is consistent with the Small Business Fair Dismissal Code (the Code). In the present matter the Respondent concedes that it was not a small business. 9
[17] Consequently, the Commission as presently constituted, finds the Respondent was not a small business employer within the meaning of s.23 of the FW Act.

Was the dismissal a genuine redundancy?

[18] The Respondent submits I should dismiss the application because the dismissal was a case of genuine redundancy. Section 389 of the FW Act defines the meaning 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.”

Was the Applicant’s job no longer required to be performed?

[19] To be satisfied the dismissal was a case of genuine redundancy, I must be satisfied that the role of Systems Coordinator in the Green Mill was no longer required to be performed by anyone because of operational changes undertaken by the Respondent.
[20] The Respondent submitted that it no longer required the Applicant’s job as Systems Coordinator in the Green Mill to be performed by anyone because of changes in its operational requirements. Under cross examination Mr Paalvast clarified that the decision to make the Applicant’s position redundant was as a result of an initiative which commenced from August 2016. At that time site management groups at various sites were required to begin a process of reducing costs by reorganising and restructuring business operations. A part of that initiative was to consider how to implement a better training system for the work site. As a consequence the Respondent decided to consolidate the Green Mill Systems Coordinator role with the Dry Mill Systems Coordinator role. 10
[21] Having considered all the evidence in the matter (including, in particular Initiative #124) the Commission as presently constituted, is satisfied that, as a result of changes in operations decided upon by the employer from August 2016, the role of Systems Coordinator in the Green Mill was no longer required to be performed as a result of operational requirements.

Did the Respondent have any obligation to consult?

[22] I must now consider whether the Respondent complied with any obligation in a modern award or enterprise agreement that applied to the Applicant’s employment to consult about the redundancy.
[23] In the present matter the Applicant submitted that the Respondent did not comply with its obligations under the consultation and redundancy provisions within the Agreement. The relevant clauses are set out below:

“Clause 4 – CONSULTATION

4.1 Consultation Regarding Major Workplace Change

4.1.1 If the company has made a definite decision to implement a major workplace change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees covered by this Agreement, the Company must consult with the employees who will be affected by the change. An employee is entitled to be represented for the purpose of consultation under this clause.

4.1.2 As soon as practicable a meeting will be convened of company representatives and relevant employee representatives of affected employees. The Company must discuss the introduction of the major change and the affect the major change is likely to have on the employees. The Company must discuss measures to avert or mitigate the adverse effect of the change on the employees.

…

4.1.6 In this clause, a major change is likely to “significantly affect” employees if it results in: termination of employment of employees, or major change to the composition, operation or size of the Company’s workforce or to the skills required of employees; or the elimination or diminution of job opportunities or job security (including reduction or limitation of opportunities for promotion or tenue); or the need to retrain employees; or the need to relocate employees to another workplace; or the restructuring of jobs.

…

Clause 24 – REDUNDANCY PROVISIONS

24.1 Application

24.1.1 Hyne Timber is committed to maintaining employment levels at its operations and will make every effort to find alternative job placement should structural changes cause job redundancy…

24.1.3 Retrenchment selection criteria will be as follows:

24.1.3.1 Voluntary redundancy in the first instance will be permitted under this Agreement and as part of the selection process each employee in the enterprise who is employed in work similar to that which the employer no longer wants done will be able to nominate for voluntary retrenchment.

24.1.3.2 Permanent employees, dependent on skill requirements, will not be retrenched while casual employees are being used by the company to supplement the workforce.

24.1.3.3 Transfer to an alternative position of equal or lesser skill and pay. If the employee declines such an offer, then the termination of employment will be deemed to have been made by the Company and the employee will be entitled to the benefits of this Agreement including the redundancy payment.

…

24.2 Period of Notice

24.2.1 The Company will consult with the employees and their chosen representative at the earliest opportunity. The Company will endeavour where possible to give three months advice of such change.

24.2.2 The Company will provide employees with notice in accordance with Clause 25.1

24.2.3 The Company will not knowingly, after notification of any redundancies, transfer an employee into a position that is to become redundant.”

[24] The Respondent submitted that there were no provisions in the Agreement which, in this case, imposed an obligation to consult about the redundancy. However, in the alternative it submitted that, to the extent that there were provisions in the Agreement which imposed obligations on it to consult about the redundancy, it had complied with those obligations.
[25] In its outline of submissions the Respondent addressed the consultation issue as follows:

“26. Hyne Timber submits that there were no provisions in the Agreement which, in the circumstances of this case, imposed an obligation on Hyne Timber to consult about the redundancy. The Applicant asserts the contrary: that both Clause 4 and Clause 24 of the Agreement impose such an obligation.

Consultation Provision - Clause 4

27. Clause 4 of the Agreement is titled "Consultation Regarding Major Workplace Change". Clause 4.1.1 provides that "the Company must consult with the employees who will be affected by the change" if

"the Company has made a definite decision to implement a major workplace change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant affect on the employees covered by this Agreement".

28. From the ordinary and natural meaning of the words in that provision, and from its grammatical structure, it is clear that there are 4 elements which must be satisfied before the obligations set out in the clause arise:

(1) The employer has made a definite decision to introduce a change; and

(2) The change is major in scale; and

(3) The change is in production, program, organisation, structure or technology; and

(4) The change is likely to have a significant on the employees.

Salisbury v McKay Drilling

29. That construction of Clause 4.1 is supported, at least in respect of the requirement that the change must be major in scale, by the decision of Commissioner Williams in Shaun Salisbury v McKay Drilling[2014] FWC 5275.

30. The aspects of the reasons in that case relevant to the present case are:

(1) The conclusion that "Whether a change has significant effects on particular employees affected is not determinative of whether or not it is a major change"; and

(2) Making one employee out of 60 redundant is not a “major change” (the issue of scale).

31. The only relevant difference between the facts in that case and those in the present case is that in Salisbury the employer had 60 employees, whereas in this case Hyne Timber has over 500 employees, with about 170 of those employed at the site where the Applicant was employed, a factor that strengthens the application of the reasoning in Salisbury to the present case. This more strongly supports the conclusion that, in this case, there was no "major'' change and therefore, Clause 4.1.1 did not operate to impose on Hyne Timber an obligation to consult.

Redundancy Provision - Clause 24 of the Enterprise Agreement

32. The Applicant contends that Hyne Timber has not complied with the obligation in Clause 24 of the Enterprise Agreement to consult about redundancy and therefore has failed to satisfy the requirement in s.389(1)(b), with the result that the termination of the Applicant's employment was not a case of genuine redundancy and so his dismissal will be an unfair dismissal if the conditions in s.385(a). (b) and (c) are fulfilled.

33. The breaches of Clause 24 which the Applicant alleges against Hyne Timber are as follows:

(1) Breach of Clause 24.1.1

– by failing to review the options of maintaining existing employment levels through the various means set out in the first paragraph of the Clause.

(2) Breach of Clause 24.2.3.1

– by failing to call for voluntary redundancies prior to making the Applicant redundant.

(3) Breach of Clause 24.1.3.3

– by failing to genuinely consider transferring the Applicant to any alternative position of lesser skill or pay.

(4) Breach of Clause 24.2.1

– by failing to consult with the Applicant at least 3 months in advance of making the decision to make his position redundant.

(1) Alleged Breach of Clause.24.1.1

34. The Applicant's contention about Clause 24.1.1 ignores

(a) the introductory words of the sentence which contains the requirement to review; and

(b) the nature of the options set out in that sentence.

35. The requirement to "review the options" arises only "Where market conditions necessitate a reduction of man hours". The options specified for review are all concerned with shedding labour resources from points of production operations which are over-staffed relative to the level of labour resources required to achieve the volumes of production matching the demand level resulting from "market conditions".

36. Thus, it is clear that Clause 24.1.1 is concerned with matching "man hours" of production capacity to the level of production output optimally matched to market demand. This is an issue concerned with direct labour costs rather than indirect overhead costs such as those incurred in Systems Coordinator job the Applicant had been doing.

37. These considerations were not relevant to the circumstances of the Applicant's redundancy. The Applicant's role was not a production role; it was an ancillary support role concerned with training and safety. On the other hand, the role to which Hyne Timber proposed to redeploy the Applicant was a production role. Accordingly, the circumstances were the reverse of those in which Clause 24.1.1 applies.

38. In any event, while the provision does impose some obligations on the employer, there is no obligation in Clause 24.1.1 to "consult about the redundancy", and therefore the provision does not attract the operation of s.389(1)(b).

(2) Alleged Breach of Clause 24.1.3.1

39. Clause 24.1.3.1 provides:

"Voluntary redundancies ... will be permitted... and each employee in the enterprise who is employed in work similar ... will be able to nominate for voluntary retrenchment.

The terms of that provision are permissive in intent and are not apt to be construed as imposing an obligation on the employer to call for voluntary redundancies. The provision does not even mention the employer. Its focus is on what employees may do. It was therefore open to the Applicant or the CFMEU to canvass other employees for voluntary redundancies; they had 14 days in which to do it; they did not do it; and did not request the employer to do it.

40. Furthermore, even if this provision did impose an obligation on the employer, it is not an obligation to "consult about the redundancy".

41. For those reasons, Clause 24.1.3.1 does not attract the operation of s.389(1)(b).

(3) Alleged Breach of Clause 24.1.3.3

42. Clause 24.1.3.3 provides for "Transfer to a lesser position of equal or lesser pay" and imposes an obligation, in certain circumstances, to make such a transfer. This, however, is not an "obligation ... to consult about the redundancy" and so does not attract the operation of s.389(1)(b).

43. In any event, Hyne Timber did in fact take steps which complied with the obligation. However, the company was able to identify only one position to which it might have been possible to transfer the Applicant. In exploring the possibility of transferring him to that position, the company had him undergo a functional assessment to determine his capacity to do that work and he failed the assessment.

(4) Alleged Breach of Clause 24.2.1

44. Clause 24.2, titled "Period of Notice", actually specifies 2 different periods, ostensibly for different purposes. Clause 24.2.2 is plain enough – it simply requires that notice of termination be given in accordance with Clause 25.1, which refers to the usual sliding scale of notice period varying according to length of service (and age).

45. The first sentence of Clause 24.2.1 obliges the company to "consult with employees ... at the earliest opportunity" - not very specific, but reasonably capable of application and verification, so long as it was clear what the obligation to consult concerned.

46. The second sentence, however, is less clear, especially about its scope and intent. It instructs the company to "endeavour where possible to give three months advice of such change". If the phrase "such change" is intended to refer to "re-assessing shift arrangements, reduction to part-time hours, or short term stand downs" dealt with in Clause 24.1.1, a 3-month delay would be, on one view, possible, but highly counterproductive in relation to effective response to market considerations.

47. The operation of that second sentence is also modified by the phrase "where possible".

48. For the reasons given above, the provision regarding 3 months advice must therefore be construed in a flexible manner having regard to, and attributing appropriate weight to, the business and operational circumstances of the employer.

49. Additionally, in conjunction with Clause 4.2.5, which relates to changes to rosters and hours of work and requires "other provisions of this Agreement concerning notice requirements" (which includes Clause 24.2) to be complied with in relation to rosters etc., a 3-month delay would be quite inconsistent with the objective set out in Clause 3.1.3: "To work collectively within a business excellence framework ... to maximise a sustainable competitive advantage."

50. A 3-month delay on matters which, to achieve the objectives in Clause 3.1.3, would in many cases need to be completed within days or at most a few weeks, is the antithesis of "business excellence" and spells death to "sustainable competitive advantage".

51. It is necessary, however, to give the words of Clause 24.2.1 some meaning if that is at all possible. And it is possible to give it some meaning in relation to some circumstances. Where "such change" is a change in technology, as mentioned in Clause 4.1.1, then there may well be a lead time in acquisition and installation of the technology that is of such length that a 3-month consultation period effectively creates no additional delay in implementation. But there are not many other circumstances in which a 3-month delay would be compatible with business excellence and a sustainable competitive advantage.

52. The obligation in Clause 24.2.1 that is operative in this case is therefore to consult at the earliest opportunity (imposed by the first sentence in the provision). Hyne Timber did that.

…

61. Hyne Timber submits that, if there was in the circumstances of this case, an obligation to consult in relation to the definite decision it had made about the Applicant's redundancy (which it does not concede), then it fulfilled that obligation in any event.

62. The actions the provisions in Clause 4 of the Agreement require the employer to take are rather restricted in scope, including specific requirements:

- To notify the relevant employees of the decision to introduce the major change;

- To discuss with the relevant employees the specific matters identified in Clause 4.1.2: introduction of the change; likely significant effects; and methods to avoid or mitigate them; and

- To give prompt and genuine consideration to matters raised by the relevant employees about the major change.

63. Even if the change affecting the Applicant was major (which Hyne Timber does not concede), Hyne Timber

• Notified the Applicant of its decision to centralise the functions relevant to his job (see Witness Statement of Adrian Paalvast dated 15 May 2017 paragraph 12);
• Discussed with him

- the introduction of that change;

- the effect it might have on him (possible termination of employment);

- and measures the business was taking to avert or mitigate that adverse effect;

(see Witness Statement of Adrian Paalvast dated 15 May 2017 paragraphs 12- 27); and

• In compliance with Clause 4.1.3.5, gave prompt and genuine consideration to the only substantive issues raised on behalf of the Applicant namely,

- the terms and conditions and rate of pay attaching to the position to which the company proposed to redeploy the Applicant; and

- the suggestion that it should not impose the condition it attached to that redeployment option i.e., that he undertake pass a functional assessment.

(see Witness Statement of Adrian Paalvast dated 15 May 2017 paragraphs 27 and 33).

64. Hyne Timber had decided not to reduce his pay and conditions if he was redeployed, but that issue became irrelevant because it decided not to accede to the second request, and the Applicant, on undertaking the functional assessment, failed to meet the requirements - see Witness Statement of Adrian Paalvast dated 15 May 2017 paragraph 22. The demand made on behalf of the Applicant that the suggested redeployment should not be conditional on that assessment was not based on any sound principle or practical reasoning and, in light of the results of the assessment, would, if Hyne Timber had yielded to that demand, have created significant risk of injury to the Applicant and/or co-workers.”

[26] The Respondent relied upon the following cases in supporting its submission:

a) Karen Baker v Roy Morgan Research Ltd[2013] FWC 6694

b) Aitken v Virgin Blue Airlines [2013] FCCA 981

[27] In its final submissions dated 23 June 2017 the Respondent submitted that:

“22. Hyne Timber does not dispute that the change from area coverage to site coverage for the support function relevant to this case may be characterised as a change to organisation or structure, but it rejects the proposition that the scope of the change in this case was "major".

23. As submitted above, the word "major" is a term that inherently involves relativity and comparison. In the context of an employer with 5 relevant employees, a change affecting 2 or 3 employees might reasonably be described as "major".

24. On the other hand, in Shaun Salisbury v McKay Drilling[2014] FWC 5275, Commissioner Williams concluded (at paragraph [81]) that a decision to make one position redundant in a situation where there were approximately 60 employees employed by the Respondent was not a "major change". Given the relative, comparative quality of the word "major", the significance of that decision is less about making one employee redundant not constituting "major change", than about making one employee redundant out of 60 not being "major change".

25. This involves a comparison of the number of employees affected in such a way with the total number of employees in the group involved in the comparison - in this case, the number of "employees to whom the agreement applies". In the case of Hyne Timber's mill at Tumbarumba, the relevant number involved in the comparison (i.e., the number of employees to whom the agreement applies) is a bit less than 170. In this context, the decision in Salisbury v McKay Drilling supports the proposition that a change affecting 3 employees to whom the agreement applies, out of approximately 150, would not be "major change" (although in a much smaller group of employees covered, it could well be).

26. The FW Act does set some sort of absolute upper numerical limit on the application of the comparative process: Section 530 effectively requires consultation where 15 or more employees are being dismissed at the same time. That, however, does not affect the applicability of the approach at lower numerical levels of dismissal, such as in the present circumstances.

27. There was some suggestion during part of the hearing that there may have been up to 4 employees affected by the change at the Tumbarumba site (Transcript 2 June 2017, PN434). This appears to have been based on suggestions that the duties of one employee had been augmented by those of the Applicant but reduced by transfer of other duties to supervisors (Transcript 2 June 2017 PN408-PN420). However, Mr Paalvast, the Hyne Timber Site Manager at Tumbarumba gave evidence that

"salaried supervisors across our shifts ... had nothing to do with any of the other roles being made redundant or taken out in terms of Maureen, Enzo or phase 2 ...." (Transcript 15 June 2017 PN672).

28. The effect of that evidence is that there were only 2 employees affected by the change. Applying the comparison implied by the word "major'', and following the rationale set out above concerning the decision in Salisbury v McKay Drilling, the change was not major in the sense required by s.205(1)(a) of the FW Act and Clause 4.1.1 of the Tumbarumba Agreement.

29. In any event, the salaried supervisors are not "employees covered by this Agreement" and there was therefore no obligation under Clause 4.1.1 to consult them. Clause 1.3.2 of the Agreement provides that "This Agreement shall specifically exclude salary contract employees.

30. Nevertheless, despite the absence of an obligation to consult them, they were in fact consulted (Transcript 2 June 2017 PN421).

31. Hyne Timber puts the following submissions about the consultation provision in Clause 24 as additional to and in support of the submissions on that topic in its initial Submissions filed on 15 May 2017.

32. Clause 4.1, the general consultation provision, is required by s.205(1) of the FW Act. The legislators regarded the need for a general consultation clause as so important that they provided, in s.205(2) and (3), for a model consultation clause (to be set out in the regulations) that is statutorily implied into an enterprise agreement in cases where the makers of an enterprise agreement omit such a consultation clause.

33. Clause 4.1.1 requires the employer to consult with affected employees only after the employer has made a definite decision to implement a major workplace change. The time frames set out in Clause 4.1 are reasonably short and prompt: "As soon as practicable" (after the definite decision has been made)(Clause 4.1.2); and "as soon as" (Clause 4.1.5).

34. Those aspects of the general, statutory consultation clause (post-decision consultation; short time-frames) stand in marked contrast to the long time frame and otherwise loose language ("endeavour where possible") in Clause 24.

35. Clause 24 can conceivably apply without the requirement for "major change". On a literal interpretation, it could be considered to apply to one solitary redundancy.

36. Hyne Timber submits that the starkness of the incongruence between Clause 24 and Clause 4 requires that the 2 clauses be "reconciled" in accordance with the principles set out in paragraph 70 of the majority judgement in Project Blue Sky. The "hierarchy of the provisions" in Clause 4 and Clause 24 must be determined; and it must be determined "which is the leading provision and which the subordinate provision, and which must give way to the other".

37. Hyne Timber submits that it is clear that Clause 4 is the leading provision and Clause 24 is the subordinate provision which must give way to Clause 4. Clause 4 is the statutorily mandated provision; the FW Act makes no express provision for a clause such as Clause 24.1.

38. Furthermore, that view, and the submissions about Clause 24 contained in Hyne Timber's initial submissions, are consistent with the "business common sense" approach to interpreting enterprise agreements which the decisions of Tracey J in TWU v Linfox and Logan J in CFMEU v BHP Coal require the FWC to apply.

39. This supports Hyne Timber's initial submissions dated 15 May 2016 regarding Clause 24.”

[28] In its outline of submissions the Applicant submitted that:

“14. The Respondent failed to comply with Clause 24.1.1 (Redundancy Provisions) of the Enterprise Agreement. Before considering redundancies or retrenchment, the clause requires the Respondent to review the options of maintaining existing employment levels through relocation to other operations, re-assessing shift arrangements, reduction to part time hours, or short term stand downs. There is no evidence that the Respondent engaged in any of these measures prior to deciding to make the Applicant’s position redundant.

15. The Respondent breached Clause 24.1.3.1 of the Enterprise Agreement in that it did not call for voluntary redundancies prior to making the Applicant redundant.

16. The Respondent breached Clause 24.1.3.3 of the Enterprise Agreement in that it did not genuinely consider transferring the Applicant to an alternative position of equal or lesser skill and pay.

17. The Respondent contravened Clause 24.2.1 of the Enterprise Agreement by failing to consult with the Applicant at least 3 months in advance of making the decision to make his position redundant.

18. The use of the term “will endeavour” implies a positive obligation on the Respondent to consult meaningfully and at least 3 months as expressly stated. It was not envisaged that the consultation would take essentially 48 hours (two working days).

19. The Applicant submits that the dismissal was harsh and was unreasonable and was unfair (Section 385 (b); and Section 387).”

[29] In his final submissions dated 23 June 2017 the Applicant submitted that:

“1. The Respondent did not consult with Mr Cepile until 27 January 2017, the day on which the Respondent had already decided to make Mr Cepile’s position redundant. In the subsequent material produced by the Respondent, specifically Exhibit R5 document titled “Initiative #124: Org Redesign – Tumba Support Services (Phase 1&2)”, it shows the Respondent made a definitive decision to restructure the mill in November 2016. On 21 November 2016, the Respondent wrote to the CFMEU advising there would be a restructure. There was no further correspondence from the Respondent, and, more importantly, the Respondent did not consult with Mr Cepile at all during this period. So much is conceded by Mr Paalvast where he admits no prior consultation occurred with Mr Cepile until 27 January 2017 (see PN614 of second transcript).

2. The Agreement, under Clause 24.2.1 requires that the Respondent will offer a three month notice if redundancies are contemplated or announced. This provision is contained under the Redundancy clause of the Agreement. We submit the Commission ought to follow the enterprise agreement interpretation principles as outlined in the Full Bench decision of Golden Cockerel. 11 Clause 24.2.1 has a clear, plain and ordinary meaning, it is also couched in mandatory terms by the use of the term “will endeavor where possible to give three months advice of such change”. The Respondent did not wish to comply with this Clause nor endeavor to provide Mr Cepile with a 3 month notice period as required (see PN470 and PN471 of the first transcript).

3. Instead, Mr Cepile received 4 days’ notice of which 2 were weekend to make some very important decision about applying for a Process Operator job in the Dry Mill. The same letter advised him his job would be redundant in 1 week and did not call for any further discussions with him or his industrial representatives as required under the Agreement.

4. The Agreement requires the Respondent to proffer voluntary redundancies (Clause 24.1.3.1). The Respondent did not do so.

5. The Agreement requires the Respondent to consider alternative positions of equal or lesser skill and pay. There were no discussions with Mr Cepile about any such alternative arrangements as required by Clause 24.1.3.3.

6. The CFMEU, Mr Cepile’s industrial representatives, wrote to the Respondent on 1 February 2017 seeking to alert the Respondent to its consultation obligations under the Agreement. In particular, the CFMEU sought to rely on Clause 5.1.9 which calls for status quo to remain before the grievance arose whilst the dispute resolution (proper consultation etc.) takes place.

7. Commissioner Riordan, in a decision 12 involving the Respondent’s jurisdictional objection to the CFMEU’s s.739 Application, noted that the Respondent’s failure to comply with Clause 5.1.9 denied the Applicant natural justice. As the Commissioner found at para 12 to 14:

[12] I do not accept that the CFMEU does not have the capacity to being an application on behalf of their member Mr Cepile, simply on the basis that his employment has been terminated. If the FWC were to countenance such a proposition then the status quo provisions of the Agreement (clause 5.1.9) would be irrelevant and have no work to do.

5. GRIEVANCE AND DISPUTE RESOLUTION

5.1 Procedure

5.1.6 The employee may nominate the union or other representative for assistance in resolving the grievance, dispute or likely dispute.

5.1.7 At each step of this procedure either party or their representative may ask for a response from the other party or their chosen representative within 2 working days or otherwise as agreed. If a response is not received within the timeframe and no reasonable reason for delay is provided, the matter may be referred directly to the FWC.

5.1.9 The status quo existing before the emergence of the grievance or dispute is to continue whilst the above procedure is being followed.”

[13] Such a scenario would create an incentive for an employer to introduce any proposed workplace change before a Union or an employee could make an application to the FWC to deal with the issue. Such a proposition would be a denial of natural justice.

[14] I note that the CFMEU wrote to Hyne on 1 February 2017 disputing the pending termination of Mr Cepile on 3 February 2017. This correspondence enlivened the status quo provisions of the Disputes Procedure. (see clause 5.9.1 above).

8. It is of some concern to the Union that the Respondent maintains the notion that the Agreement does not require the Respondent to consult with affected workers and the Union in circumstances where major change to the composition of the workplace is announced. We submit consultation obligations are enlivened even if one employee is proposed to be made redundant. But even if we entertain the Respondent’s notion that multiple employees need to be made redundant before consultation obligations are enlivened, Mr Paalvast conceded multiple employees had been made redundant in Mr Cepile’s area (see PN432 of first transcript). There is no evidence from the Respondent that the workers had been consulted meaningfully or at all.”

Consideration – obligation to consult
[30] The submissions of the Respondent too narrowly confine the consideration of whether it had an obligation to consult to the decision to consolidate the systems coordinator roles in the Dry Mill and Green Mill.
[31] What is apparent from Exhibit R5 is that the Respondent was engaged in a large scale reorganisation of its business operations particularly in the production business unit. There were at least 29 initiatives being implemented. The reorganisation of the Support Services area was but one initiative (Initiative #124) amongst a much larger workplace change agenda.
[32] There can be no doubt that from August 2016 the Respondent had made a definite decision to implement major workplace change. Initiative #124 was but one element of that major program. Naturally enough each of the initiatives had a separate timetable. In respect of Initiative #124 it was:

a) designed around November 2016.
b) due to commence on 3 November 2016 and end date by 1 July 2017.
c) designed in 2 phases.
d) intended to impact on 6 roles.
e) finally decided in around mid-January 2017 to combine Ms Dowell’s role with that of the Applicant
f) decided on or around 25 January 2017 to instal Ms Dowell into the combined site trainer role (without an open selection process).

[33] In addition to the broader impact of the entire workplace change program Initiative #124 (i.e. that part of it which comprised the decision to combine Ms Dowell’s role with that of the Applicant) impacted upon the incumbents in the roles and others. It is factually incorrect to assert, as the Respondent first attempted to do, that the impact was solely on Mr Cepile and, therefore, was not major.
[34] It too narrowly confines the operation of the consultation clauses in the Agreement to but one discrete part of a much broader workplace change program. For these reasons the facts in the present case can be distinguished from those in Shaun Salisbury v McKay Drilling. 13
[35] Therefore, the Commission, as presently constituted, is satisfied that the Respondent had (by August 2016) made a definite decision to implement major workplace change and that it had or was likely to have a significant affect on employees covered by the Agreement. As a consequence the consultation provisions of the Agreement were enlivened.

Did Hyne Timber comply with its consultation obligations?

[36] It is well established that:

a) the consultation should be meaningful and should be engaged in before an irreversible decision to terminate has been made; 14 and,
b) “Consultation is not perfunctory advice on what is about to happen ... [c]onsultation is providing the individual, or other relevant persons, with a bona fide opportunity to influence the decision maker.” 15

[37] In the present matter:

a) the workplace change program commenced from August 2016,
b) Initiative #124 was designed in November 2016,
c) a decision was made to put Ms Dowell into the combined role in mid-January 2017,
d) Ms Dowell was put in to the combined role around 25 January 2017,
e) the Applicant was only informed about his position being made redundant on 27 January 2017.

[38] That is to say, by 27 January 2017 an irreversible decision had been made to abolish the Applicant’s position in circumstances where he was never consulted about that decision. It was communicated to him two days after a position that he could otherwise have applied for had already been filled without a selection process. The Applicant was given two business days to decide between accepting a redundancy payment or applying for a Process Operator role (subject to a functional assessment). It was only through the intervention of his union that caused a momentary delay in the ultimate decision to terminate the Applicant’s employment. The Applicant did not pass the functional assessment and yet he was not provided with an opportunity to comment on it and nor was there any discussion about what reasonable accommodations might be put in place to assist his functional capability. Nothing about the process followed by the Respondent constituted a genuine attempt to avert or mitigate the adverse effect of the change that was being imposed upon the Applicant.
[39] For these reasons, the Commission, as presently constituted, is not satisfied that the Respondent complied with its obligations under the Agreement to consult about the redundancy prior to dismissing him.
Was redeployment reasonable in all the circumstances?
[40] Section 389(2) provides that even if the Commission is satisfied that,

a) the role of Systems Coordinator in the Green Mill was no longer required to be performed by anyone (which I am), and
b) all consultation obligations in a modern award or enterprise agreement that applied to the Applicant’s employment were complied with (which I am not),

I must consider if redeployment was appropriate in all the circumstances.
[41] In the Respondent’s outline of submissions, it submitted the following:

“65. The Applicant cites 2 cases said to be relevant to this issue.

Crema v Abigroup Contractors Pty Ltd[2012] FWA 5322

66. The Applicant puts forward the decision in Crema v Abigroup Contractors Pty Ltd[2012] FWA 5322 as authority for the proposition that an "Employer has an obligation to offer a reasonable period of re-training to the employee in order to redeploy them to another division of the business".

67. In Crema, Commissioner Cribb said (at para. [160]) that

It would seem unreasonable for four current employees to have been dismissed when four other people, who are not employees of the company, are offered employment and a 10 week training course with on the job support and supervision after the course.

68. The only mentions of retraining (or even training) other than the reference above occur in paras [76], [77], [83], [85], [98], [102], [123], and [158] merely in the course of discussing parties' submissions.

69. In any event, the decision of Commissioner Cribb was quashed by the Full Bench on appeal and remitted to the Commissioner to be redetermined -see Abigroup v Crema[2012] FWAFB 5453.

70. The case certainly does not support the proposition advanced on behalf of the Applicant that “the employer has an obligation to offer a reasonable period of re-training to the employee in order to redeploy them to another division of the business.” Aldred v J Hutchinson Pty Ltd[2012] FWA 8289

71. The Applicant (at subparagraph 22(d) of his Outline of Submissions dated 20 April 2017) cited the decision of Aldred v J Hutchinson Ply Ltd[2012] FWA 8289 as authority for the proposition that "the obligation to redeploy a worker may extend to offering the employee redeployment within the company's operations interstate".

72. In Aldred v Hutchinson, the Respondent employer "conceded that it did not comply with the consultation obligations prescribed in" the relevant agreement (see paragraph [18] of the reasons for decision), so the issue of redeployment was not a decisive factor in the reasoning. In contrast, in the present case, Hyne Timber had consulted the Applicant about redeployment.

73. Furthermore, in Aldred v Hutchinson, Commissioner Lewin noted that the Applicant (Aldred) had volunteered to the employer that he "would have accepted a job with the Respondent in Queensland, would cover related costs at his own expense and this was clear to" the employer (see para [22]).

74. The current matter is distinguishable from Aldred because:

In the current matter, Hyne Timber did consult the Applicant about the option of redeployment and had made specific assessment arrangements with a view to such redeployment; and

Unlike the employee in Aldred, the Applicant gave Hyne Timber no indication that he was open to exploring options further afield than the Tumbarumba Mill.”

Following the hearing the Respondent asserted the following in its final submissions:

“81. At the time of consulting with the Applicant about the decision made recently to make changes which would result in his redundancy, Mr Paalvast offered the Applicant the opportunity of redeployment to a position in the Dry Mill, subject to his passing a functional work capacity assessment relevant to the tasks involved in the job. [PN183; PN186; PN191; PN196-PN207].

82. At the resumption of the hearing of the Applicant's claim (15 June 2017), the Applicant's representative put to Mr Paalvast copies of advertisements for casual positions in the Dry Mill.

83. Mr Paalvast gave the following evidence:

"Those positions at the time did not exist when Mr Cepile was made redundant. The only positions that existed were a process operator role in the dry mill which he was offered and didn't pass the functional for. He was offered the role and he couldn't pass the functional, so we determined that we can't accept him into a role if he can't functionally carry it out." [PN632].

"So the kilns relief role that's in there only came up subsequent to Enzo leaving the site." [PN634].

"... a lot of the process roles around the shuck table are actually casual roles.

Enzo was looking for a full-time role. He was offered the full-time process operator role and failed the functional for it." [PN635].

"I didn't have any lesser positions at the time." [PN636].

"He was asked where he would like to work and he expressed an interest in going into the dry mill." [PN638].

"Where there are casual positions?--Yes, and one full-time position. He was offered the full-time position, but filed [sic] the functional. Either way, the functional would prohibit him from working in any of those roles. [PN639]

So in terms of the positions that remain available, what vacancies remain available now?--! Don’t believe the full-time process operator is available in the dry mill. There were five casual positiona available and four of those were in the process of being filled, so we were still looking for an Applicant for a casual process operator [PN641].

There would be no impediment to ... ordering that Mr Cepile be re-employed in those roles?---Other than the functional. [PN642].

But those positions exist?---Yes. So the relief- the operator role in the kilns and at least one of the casual roles in the dry mill exist currently. [PN643].

Why couldn't he perform the operator role in the kiln?---Because he has failed the functional requirements on about five or six of the aspects that we require him to pass. He hasn't met the minimum levels in those. [PN644].”

[42] In its final submission the Applicant submitted that:

“9. We submit Mr Cepile could have been offered the joint trainer and assessor role in the Green Mill and the Dry Mill but was not. It was instead offered to Ms Dowell. Mr Paalvast puts this down to “an oversight” (see PN359 of the first transcript). Mr Cepile has the requisite skills and experience to be considered for the joint role but was not offered that consideration. Mr Paalvast made a decision not to consider Mr Cepile for the merged role two days before he advised Mr Cepile he would be made redundant (PN361 of the first transcript). Mr Paalvast conceded there were no performance or conduct issues regarding Mr Cepile. Therefore we submit he ought to have been considered as a candidate to fill the joint role. As such, Mr Cepile’s dismissal is not a case of genuine redundancy. The Respondent has failed to comply with requirements in Section 387 of the Fair Work Act 2009 (Cth) (FW Act) and consequently the dismissal was unfair within the meaning of Section 385 of the FW Act.

10. We submit Mr Cepile could have been redeployed into the Process Operator job in the Dry Mill without needing to sit the physical assessment test. Mr Cepile was already performing work in the Dry Mill albeit intermittently. We further submit the physical assessment is not final and not conclusive on Mr Cepile’s physical abilities. The document clearly states “further assessment recommended”. And if the Respondent had any concerns about Mr Cepile’s physical abilities after the assessment, the Respondent could have sought to make reasonable adjustments to the Process Operator job in the Dry Mill (or to the joint position), as is the Respondent’s obligation under equal opportunity laws and disability discrimination legislation. Instead the Respondent opted for dismissal.”

[43] Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal. 16
[44] In determining whether the redeployment was reasonable a number of matters may be relevant including:

a) whether there exists a job or a position or other work to which the employee can be redeployed; 17
b) the nature of any available position;
c) the qualifications required to perform the job;
d) the employee’s skills, qualifications and experience; and
e) the location of the job in relation to the employee’s residence and the remuneration (pay and entitlements) which is offered. 18

[45] The starting point for the analysis therefore, is to ask around the time of dismissal “was there a job or position or other work which Mr Cepile could have been redeployed into?”
[46] Of course we know from the chronology of events that, two weeks prior to the first indication that his employment was likely to be terminated, there was a position for which Mr Cepile could have applied and, if selected, appointed into (i.e. the combined Coordinator Role). However, that opportunity was denied to him because of the decision made to appoint Ms Dowell into that role without a selection process.
[47] The facts also establish that there was a need for a Process Operator. The only reason why the Applicant was not appointed into that role is because he failed the functional assessment. However it is clear that no consideration was given by the Respondent to the reasons why Mr Cepile failed the functional assessment and what, if anything, could be done to assist his functional capability. For example, the issue of his below average grip strength might have been addressed by a redesign of the work process. Without speculating further about what accommodations might have been possible, the point to note is that no consideration was given to any accommodation that might have seen the Applicant retained in employment.
[48] Noting that there were at least two vacancies (one immediately before the decision to terminate employment and one at the time of termination), in all the circumstances, the Commission, as presently constituted, is satisfied that it would have been reasonable for the Applicant to be redeployed within the Respondent’s enterprise if either:

a) he had been provided with an opportunity to apply for the combined role, and or
b) consideration was given to accommodations that might assist his functional capability.

Conclusion about genuine redundancy

[49] The Commission, as presently constituted, is satisfied that the Applicant was protected from unfair dismissal but that the dismissal was not a case of genuine redundancy within the meaning of s.389 of the FW Act.

Harsh, unjust or unreasonable

[50] Having determined that the termination of Mr Cepile’s employment was not a case of genuine redundancy I must now consider whether I am satisfied the dismissal was harsh, unjust or unreasonable.
[51] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[52] The criteria the Commission must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the FW Act:

“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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 reason; 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 the FWC considers relevant.”

[53] Ordinarily I would be under a duty to consider each of these criteria in reaching my conclusion. 19 However, because the dismissal was not a case of genuine redundancy the consideration of the matters specified in s.387(a), (b) and (c) are neutral, unless in the circumstances another valid reason is identified. No other valid reason was identified by the Respondent.

[54] Matters arising from the redundancy (e.g. a failure to consult with the Applicant) fall within s.387 (h). 20
[55] Therefore, in relation to of the Applicant I am satisfied that:
Valid reason - s.387(a)

a) The Respondent did not assert that the reason for the dismissal of the Applicant was related to his capacity or conduct. Accordingly there cannot have been, and there was not, a valid reason for the dismissal related to his capacity or conduct.
b) In all the circumstances of this case I regard this element of s.387 as a neutral consideration in respect of whether the dismissal of the Applicant was harsh, unjust or unreasonable.

Notification of the valid reason and opportunity to respond - s.387(b), (c)

a) The matters in s.387(b) and (c) of the FW Act deal with whether there was procedural fairness in respect of a reason for dismissal related to capacity or conduct.
b) The dismissal of the Applicants was not related to capacity or conduct.
c) Consequently, in all the circumstances of this case I regard this element of s.387 as a neutral consideration in respect of whether the dismissal of the Applicant was harsh, unjust or unreasonable.

Unreasonable refusal by the employer to allow a support person - s.387(d)

a) Where an employee protected from unfair dismissal requests a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.
b) In the present matter after the first meeting the Applicant was represented by his union, the CFMEU. There was no refusal (unreasonable or otherwise) to allow them to have a support person.
c) In all the circumstances of this case I regard this element of s.387 telling against whether the dismissal of the Applicant was harsh, unjust or unreasonable.

Warnings regarding unsatisfactory performance - s.387(e)

a) The Respondent did not assert that the dismissal of the Applicant related to his unsatisfactory performance, so this matter is not relevant to my consideration as to whether the dismissal was harsh, unjust or unreasonable.
b) In all the circumstances of this case I regard this element of s.387 as a neutral consideration in respect of whether the dismissal of the Applicant was harsh, unjust or unreasonable.

Impact of the size of the Respondent on procedures followed and Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(f), (g)

a) The size of a Respondent’s enterprise may impact on the procedures followed by it in effecting a dismissal. Further, the presence of dedicated human resource management or expertise in a Respondent’s enterprise should ensure a higher standard of management of human resources.
b) In the present matter the Respondent is a large employer and well resourced.
c) In all the circumstances it is apparent that the size of the Respondent did not have any adverse effect on the procedures it adopted in dismissing the Applicant. In fact it could have been expected that an employer such as the Respondent, with the resources it had at its disposal, would have done a better job at the time it adopted its processes.
d) In all the circumstances of this case I regard this element of s.387 as a neutral consideration in respect of whether the dismissal of the Applicant was harsh, unjust or unreasonable.

Any other matters that the FWC considers relevant – s.387(h)
[56] Having considered each of ss.387(a), (b), (c), (d), (e), (f), (g) of the FW Act, it remains necessary to now consider subsection 387(h) in respect of the Applicant. Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant.
[57] Once I have considered s.387(h) in combination with each of ss.387(a), (b), (c), (d), (e), (f), (g) of the FW Act, I must then decide (in respect of the Applicant) if, in all the circumstances, the termination of the Applicant’s employment was harsh, unjust or unreasonable. Deciding whether the termination was ultimately unfair involves the exercise of discretion.
[58] Although s.387 includes matters that the Commission must take into account in deciding how to exercise its discretion, the discretion conferred is otherwise expressed in general, unqualified terms. Of course, the discretion conferred must be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative purpose. Further, the discretion is also confined by the subject matter, legislative context and purpose.
[59] In exercising the discretion, guidance can be drawn from s.381 of the FW Act. It provides that:

“Object of this Part

(1) The object of this Part is:

a) To establish a framework for dealing with unfair dismissal that balances:

a. The needs of business (including small business); and

b. The needs of employees; and

b) To establish procedures for dealing with unfair dismissal that:

a. Are quick, flexible and informal; and

b. Address the needs of employers and employees; and

c) To provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

Note: the expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.”

[60] In respect of Mr Cepile I consider the following matters to be relevant to the determination of whether his dismissal was harsh, unjust or unreasonable:
Matters telling against a conclusion that the dismissal was harsh, unjust or unreasonable

a) as a result of changes in operations decided upon by the employer from August 2016, the role of Systems Coordinator in the Green Mill was no longer required to be performed as a result of operational requirements.

Matters that support a conclusion that the dismissal was harsh, unjust or unreasonable

b) the Respondent failed in its consultation obligations,
c) the Respondent failed to allow the Applicant to apply for the consolidated role before appointing Ms Dowell without a selection process,
d) the Respondent failed to consider what accommodations might be put in place to assist the Applicant with his functional capability for the Process Operator role,
e) the Respondent did not, as required by the Agreement, “make every effort to find [an] alternative job placement” for the Applicant,
f) the Respondent did not, as required by the Agreement, endeavour to give three months’ notice of the decision to abolition his role (noting that the decision was made in November 2016 and not communicated to him until 27 January 2017),
g) the Applicant is 60 years of age,
h) the Applicant lives in Tumbarumba (i.e. a small country town with limited employment opportunities beyond the Respondent which is the largest employer in town),
i) the Applicant has limited qualifications,
j) there were no issues with the Applicant’s conduct or performance, and
k) the dismissal has had a profound impact on the Applicant.

[61] Having considered each of the matters specified in s.387, the Commission, as presently constituted, is satisfied that, overall, and having regard to the obligation to afford a “fair go all round” the dismissal of Mr Cepile was unreasonable and harsh. The deficiencies in the consultation process and failure to genuinely consider redeployment, leads me to the conclusion that the dismissal was unreasonable because it was decided upon incomplete information in circumstances were Mr Cepile was not genuinely consulted or provided with the redeployment opportunities. Further it was harsh because of the impact on Mr Cepile having regard to his age, location and lack of qualifications.
[62] Accordingly, the Commission, as presently constituted, finds Mr Cepile’s dismissal was unfair within the meaning of the FW Act.

Remedy

[63] Section 390 of the FW Act sets out the circumstances in which I may make an order for reinstatement or compensation:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the 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) The Commission may make the order only if the person has made an application under section 394.

(3) The Commission must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the 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.”

[64] I have already dealt with the issues at s.390(1)(a)–(b) above. The Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal pursuant to s.382 of the FW Act and the Applicant was dismissed unfairly. Accordingly, the Commission is required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if it is satisfied such an order is appropriate in all the circumstances.

Reinstatement

[65] The Applicant seeks reinstatement or, in the alternative, compensation as the primary remedy. Regardless of the remedy sought by the Applicant, s.390 of the FW Act requires that I first determine whether reinstatement is appropriate before I may consider an order for compensation.
[66] Section 391 of the FW Act provides:

“391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.”

[67] Having found that, as a result of changes in operations decided upon by the employer from August 2016, the role of Systems Coordinator in the Green Mill was no longer required to be performed as a result of operational requirements I am satisfied that it would be inappropriate to reinstate Mr Cepile into the position in which he was employed immediately before the dismissal.
[68] However, I am presently unable to decide if I should appoint Mr Cepile to another position on terms and conditions no less favourable than those on which he was employed immediately before the dismissal.
[69] Although some evidence was lead at the hearing about positions available with the Respondent, I am conscious that the Respondent has been in a state of change involving a restructure and that consequently, the situation may have changed since the matter was last heard on 15 June 2017. It may be that more opportunities have arisen. Or it may be that there are now lesser opportunities.
[70] Further, in relation to the question of compensation, the parties have not put on sufficient evidence addressing each of the elements of s.392.
[71] Section 392 of the FW Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered:

“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), the FWC 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 the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC 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 the FWC 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 the FWC 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.

Note: subsection 392(5) indexed to $61,650 from 1 July 2012

(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

(b) 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.”

[72] The method for calculating compensation under s.392 of the FW Act was dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 21 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations FW Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket22 and Ellawala v Australian Postal Corporation23.
[73] If compensation is appropriate I will adopt the methodology utilised in Bowden in determining the amount of a payment of compensation.
[74] Therefore, as a matter of procedural fairness, the parties should be provided with an opportunity to put on any additional material in relation to the question of reappointment and compensation.
[75] Accordingly, Mr Cepile’s application for an unfair dismissal remedy, if any, will now be programmed for further hearing.

[76] An Order and Directions will be issued with this decision.

COMMISSIONER

Appearances:

Malbasa, D from the CFMEU for the Applicant.

Swan, M from AiGroup for the Respondent.

Hearing details:

Sydney,

2 & 15 June,

2017

Final written submissions:

Applicant’s Final Submissions dated 23 June 2017

Respondent’s Final Submissions dated 23 June 2017

1 Transcript PN75-81

2 Transcript PN235.

3 Exhibit “R5”.

4 Transcript PN390-401.

5 Transcript PN326-362.

6 Transcript PN409-419.

7 Exhibit “R4” (confidential exhibit pursuant to s.594 Order).

8 Exhibit R2 at Paragraph 34

9 Exhibit R2 at paragraph 2

10 Transcript PN375-388

11 The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited [2014] FWCFB 7447.

12 Construction, Forestry, Mining and Energy Union v Hyne Timber Pty Ltd T/A Hyne Timber [2017] 2941

13 [2014] FWC 5275.

14 Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company (1998) 88 IR 202, 218; cited in

Steele v Ennesty Energy Pty Ltd T/A Ennesty Energy [2012] FWA 4917 (unreported, Jones C, 21 June 2012) [20].

15 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v

Vodafone Network Pty Ltd (unreported, AIRC, Smith C, 14 November 2001) PR911257 [25].

16 Ulan Coal Mines v Honeysett (2010) 199 IR 363, 370 [26].

17 Technical and Further Education Commission (t/a TAFE NSW) v Pykett (2014) 240 IR 130, [36].

18 Ulan Coal Mines v Honeysett (2010) 199 IR 363 [28].

19 Sayer v Melsteel[2011] FWAFB 7498.

20 UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263.

21 [2013] FWCFB 431.

22 (1998) 88 IR 21.

23 Print S5109.

Printed by authority of the Commonwealth Government Printer

Enzo Cepile v Hyne Timber Pty Ltd

[2017] FWC 3870

29 AUGUST 2017

DECISION