Felipe Rocha de Souza v Upc Pty Ltd

[2019] FWC 4936

[2019] FWC 4936

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394—Unfair dismissal

Felipe Rocha de Souza
v
UPC Pty Ltd
(U2019/2643)

DEPUTY PRESIDENT SAMS SYDNEY, 19 JULY 2019

Application for an unfair dismissal remedy – whether genuine redundancy – marketing for international students to study in Australia – applicant engaged to explore and develop South American and European markets – results not promising – warning of redundancy – alleged agreement to take leave without pay – no market improvement – redundancy of applicant – genuine reason for redundancy – no options for redeployment – objection of respondent upheld – genuine redundancy – no jurisdiction of the Commission – application dismissed.

INTRODUCTION

[1] Mr Felipe Rocha de Souza was first employed by the University Preparation College (‘UPC’ or the ‘respondent’), pursuant to a fixed three month term contract as a Project Manager from 20 August 2018 to 19 November 2018. UPC is a registered training organisation which delivers vocational education programs to domestic and international students. The majority of students are international students, primarily from Asia. UPC has two campuses in New South Wales. Mr de Souza was tasked to open new market opportunities targeted at students from South America and Europe, to study in Australia. He became an ongoing employee of UPC on 1 December 2018 in the role of Sales and Marketing Manager on a salary of $95,000 per annum.

[2] On 8 March 2019, Mr de Souza received the following letter from Dr Kam Ming Yu, Chief Executive Officer:

‘Dear Mr Felipe Rocha de Souza,

After more than nine months of trying to enter the South American and European markets without tangible success, the senior management has decided to leave these two markets and reallocate our resources to concentrate on our traditional markets in Asia.

In light of this decision, we are sorry to inform that the position of Sales and Marketing Manager (South American and European Markets) has been abolished and your employment with UPC will unfortunately be ended (sic) on 7^th April, 2019.

We are going to inform the Home Affairs Department about the decision. Please contact your migration lawyer who can advise you further about your immigration status.

We are regretted about the decision and we wish you successful (sic) in your career development.

Yours sincerely,

Dr Kam Ming Yu

Chief Executive Officer’

[3] On the same day, Mr de Souza (hereafter the ‘applicant’) filed an application, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’), in which he disputes the termination of his employment as a genuine redundancy. He claims his dismissal was unfair because:

‘the company has been threatening me and my partner to cancel my visa class 482 in case I insisted to have my wages and expense reports from previous working activities paid.

I demanded them to pay me till Friday (March 15) they have served me a termination letter today (they own (sic) me approx.. 12k).’

[4] Unsurprisingly, the respondent objected to the application, on the grounds that the termination of employment was a genuine redundancy, pursuant to s 389 of the Act which states:

‘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.”

[5] The respondents declined to participate in a conciliation of the matter, and sought to have its jurisdictional objection determined as a preliminary matter. The application was remitted to me for that purpose, and directions were issued on 11 April 2019 for a hearing on 11 June 2019.

[6] At the hearing, the applicant represented himself, and Mr H K So and Dr K Yu appeared for UPC. Mr So and the applicant provided witness statements with various annexures and were cross examined on their evidence.

THE EVIDENCE

For the respondent

Mr Hoi Ken So

[7] Mr So is employed as the respondent’s Corporate Services Manager, and reports directly to the CEO, Dr Ken Yu. Mr So’s statement dealt with the consultation he had with the applicant in respect to his redundancy. Mr So said that on 7 February 2019, Dr Yu informed him that a decision had been made to cease exploring business opportunities in the South American and European markets. This was because the number of student applications and enrolments were not promising, and it was not financially sustainable to continue to do so. This meant the applicant’s position was to be made redundant. Dr Yu sent Mr So a proposed termination letter unsigned. Dr Yu told him that he should discuss the matter with the applicant, and explore other options for continuing his employment with UPC. This was why the letter of termination was unsigned.

[8] Mr So met the applicant that day and gave him the unsigned letter and explained the respondent’s position. He told the applicant that Dr Yu wanted to find a solution to maintain his position, and asked the applicant for his views on this. The applicant told him he was confident the student applications would increase. He believed in the market opportunities in South America and Europe, but breaking into the markets takes time. Mr So said that the applicant told him he had plans for business trips in the coming months to Singapore, Brazil and Europe. When he told the applicant that UPC was not likely to be in a position to fund these trips, the applicant said he was so confident in the potential markets that he would pay for these trips himself. This led to a discussion of the applicant taking leave without pay in order to provide him with another chance to secure student applications for enrolment in the markets, without the Company incurring further costs. If he succeeded, his employment ‘could be resumed.’ Mr So proposed to take this plan to management and if the applicant succeeded, he would try to convince Management not to withdraw from the markets. Mr So claimed the applicant accepted this idea and on the same day, Dr Yu also accepted the idea. The applicant submitted an application for leave without pay from 8 February 2019 – 8 March 2019. Mr So said that after a further month passed with no improvement in market opportunities in South America and Europe, Management decided to implement the original decision to terminate the applicant’s employment.

[9] Mr So supplemented his statement evidence in a document headed ‘Outline of Submission’. For convenience, I shall refer to relevant parts of that submission. Mr So said that the applicant’s last working day was 5 April 2019. His salary at that point was $52,848.77, including superannuation. Mr So claimed that as at April 2019, only two students had enrolled from South America and Europe, one from the United States (tuition fee $3,000) and one from Brazil (tuition fee $4,000). This was not financially sustainable. He compared this to the engagement of another Marketing Manager in November 2018 to develop the Japanese market (to that time no Japanese student had been enrolled). As of 5 April 2019, this employee had secured tuition fees of $134,000 after less than five months.

[10] As to redeployment opportunities, Mr So said that UPC has five Marketing Managers, all of whom speak at least one of the languages in their various markets in China, Taiwan, Hong Kong, Japan, South Korea, Nepal, India, Vietnam and the Philippines; this is a prerequisite for a Marketing Manager. As the applicant could speak no Asian language, there was no suitable or reasonable alternative position to which he could be appointed. Further, the applicant was working under a working visa subclass 482, and could only work according to the visa’s requirement (i.e. as a Sales and Marketing Manager). Therefore, he could not be redeployed to any other UPC department, other than in a Marketing position.

Case for the applicant

[11] The applicant believed that there were many ongoing projects and prospective applications, and no one had told him his performance was based on tangible results, particularly as he had not even completed one year in his position.

[12] The applicant claimed that because there were issues about the status of his visa, Mr So used coercion and threatened him and his spouse, by forcing him to sign a Leave Without Pay (‘LWP’) request, which in any event was not signed by the employer. He claimed the leave request included in the respondent’s evidence was fraudulent.

[13] The applicant said there had never been any consultation about his employment, much less that there was any agreement to not be paid for a month. He believed that if the redundancy was genuine, UPC would have just terminated his employment.

[14] The applicant said that after a month, Mr So asked him if he wanted to continue with the same arrangements to protect his visa conditions. He even said that his partner could support him while he worked without pay. The applicant said, ‘It is on absurd. I cannot to this anymore (sic).’ Mr So replied that he was going to inform immigration. The applicant left immediately and filed his s 394 application that day.

[15] In his submissions, the applicant asserted that to enter a new market can take up to two years to have solid numbers. He had done all the necessary preparatory work, but encountered several inhibiting factors; see: Document ‘B’ 1-12.

[16] The applicant said he had worked in this industry for five years and travelled to around 50 countries to develop business partnerships and recruit students. He was never limited to two regions. The applicant claimed he was involved in handling and processing applications of students from countries other than South America and Europe, with their prospective start dates. There were 13 students from various countries (2 were those from the United States and Brazil; see: [9] above. Their total potential tuition fees were $93,300. The applicant claimed that Mr So’s comparison to Japanese students was not sustainable because:

(a) Japan is a Level 1 country which means immigration requirements are less stringent.

(b) Japan is closer to Australia, and there is a large Japanese student population in Australia, making it more attractive.

(c) Japan has a strong and stable currency, compared to students in Level 2 & 3 categorised countries.

[17] The applicant added that he had received compliments from UPC for his work. He claimed the respondent hired two marketing and sales staff to do his job after his redundancy. This proves his dismissal was not a genuine redundancy because his job was still required to be performed (by two persons).

[18] The applicant believed that it was not a mandatory requirement to speak a particular Asian language, as demonstrated by his list of students he referred to which included students from Indonesia, the Philippines and Mongolia. In any event, he speaks fluent English, Spanish, Portuguese and French, and the work of two employees who left the Company could have been allocated to him, had his employment with UPC continued.

[19] The applicant claimed the real reasons his employment was terminated were:

‘(a) I started to push employer for budget and also question UPC about payment/salary responsibilities. It had become a fashion to have them delaying my payments and not even giving a satisfaction to me.

(b) In regards to the international trips to participate in the events UPC had already engaged prior to my arrival in Australia, I declare that I have never been paid till the day of today in its totality. All receipts have been sent along with the form of expense Reimbursement; however UPC has failed to provide reimbursement to me as well as had confirmed that will only discuss these items on Small claims court.

(c) Didn’t accept to work for free and engage in dodgy dealing with employers

(d) Started to question the way business operated and this created heated conversation between employer and employee

(e) Employee decided to lodge a complaint at Fair Work Office.’

In reply

[20] In a reply submission, Mr So denied it took one and a half to two years to develop new markets. While there is no general target benchmark, in the applicant’s contract, he clearly agreed to an annual target of 40 students from South America and Europe, based on his experience and know-how:

‘Annual sales target is 40 students per year including South American and European markets by direct enrolment (20 students) and student recruitment agents (20 students) for UPC. Two students enrolled through agent are equivalent to one direct enrolment student’.

[21] Mr So rejected the applicant’s claim of involvement in projected student enrolments valued at potential tuition fees of $93,300. The actual successful enrolment results are three students whose total fees are $23,000. Further, the applicant only achieved five successful enrolments from South America and Europe in eight months of employment. Mr So stressed that despite the applicant’s assertion that he was never told of his performance, UPC had evaluated the outcome of the South American and European markets, and did not evaluate the applicant’s actual performance. Shortly stated, it was not the applicant’s performance in his role that was the primary issue; it was the role itself.

[22] As to the applicant’s claim that two employees were hired to perform his duties, this assertion was incorrect. One person had been hired in response to the expanding the Vietnamese market (70 new students) and the second person was employed in an administrative capacity, and not in the Marketing Team.

[23] Mr So described the nature of UPC’s business to address the applicant’s claim that other employees did not speak the language of their student cohort. The business has a number of ‘Established Markets’ (‘EMs’), such as Vietnam, Nepal, China etc. which are each assigned to a relevant language speaking Marketing Manager to maintain a good network with local agents and build brand name and reputation. There are other countries (e.g. Mongolia, Lebanon and Ghana) known as ‘Non-Established Markets’ (‘NEMs’) from which occasional, sporadic applications are received. These are distributed across all the Marketing Managers, depending on workload, until the country becomes an EM.

[24] It was misleading for the applicant to claim he was not told his results were not as expected. Regular Marketing meetings are held where this information is discussed. Mr So said that at no time did UPC consider withdrawing the applicant’s subclass 482 visa. The subclass 482 visa was made in October 2018, well before the concerns were raised on 7 February 2019. Mr So defended the hiring of two new persons as being irrelevant to the applicant’s circumstances. Mr So rejected the applicant’s belief that the termination of his employment had to do with his complaint to the Fair Work Ombudsman (‘FWO’) on 13 March 2019. Firstly, this was after the termination of employment (8 March 2019) and it could not have possibly had anything to do with the issues raised over a month earlier. Secondly, a FWO conciliation on 12 April 2019 concluded that no further action would be taken with regards to the applicant’s complaint.

Viva voce evidence

[25] Mr So reiterated the respondent’s position that the market results are different to an individual’s performance, and at each regular marketing meeting, results were tabled, reviewed and shared with the whole team. Mr So agreed he had himself handled two applications from students in the Philippines, and both had their visa applications rejected. He agreed he did not speak Tagalog, but this was an example of a NEM for which he sought other marketing assistance.

[26] Mr So said that UPC currently has ~100 international students, all of whom have had visas granted. Japan and China are still NEMs. Mr So explained that UPC delivers educational courses and is registered with the Australian Skills Quality Authority (‘ASQA’). UPC’s licence expired in 2018, and an audit is currently being conducted by ASQA in order for a new licence to be granted for another seven years.

[27] Mr So could not say whether a month was a sufficient timeframe for the South American and European markets to be identified as a good potential. Clearly, the previous eight months had not worked. However, he relied on the applicant’s assurances that he could show improved results doing a LWP period of a month, in which the business would not be incurring further expenses without any results.

[28] Mr So believed only one visa was granted to a Brazilian student during this month. Mr So did not know what level of contact the applicant had with a Philippine agent/s; but this was still not an EM; nor was it from South America or Europe. Mr So noted that of the 140 students who had applied, 70 were from Nepal and 70 from India.

[29] Mr So confirmed that all of the applicant’s claimed expenses for travel to Europe had been paid. Any claimed outstanding amount was taken to the FWO by the applicant, and that matter was concluded (the applicant claimed he was still owed ~$12,000.00 in unpaid expenses). Mr So reiterated that it was not his decision as to where UPC put resources when exploring or developing an individual country’s potential. The applicant sought to rely on Austrade (Australian Trade and Investment Commission) information as to the market potential in the identified regions. However, Mr So said this was not relevant to UPC’s results or decision making.

[30] In the applicant’s oral evidence, he claimed he did not complain about being allegedly threatened because he was waiting for the right time after collecting evidence to present to a court. The applicant further claimed he signed the LWP request because he knew the respondent was acting illegally and he wanted the proof. The applicant then said the right word was not ‘threatening’, but rather ‘blackmailing’ undertaken by UPC regarding his visa.

Final submissions

For the respondent

[31] Mr So said it was totally wrong that he had threatened the applicant and forced him to sign a LWP application. There was no reason for him to threaten. Moreover, the applicant kept silent and never said anything until his complaint to the FWO on 13 March 2019. The business was doing its best to retain him as an employee. The applicant’s claims in both the Commission and the FWO were simply revenge for the redundancy decision. In any event, the applicant was never asked to do anything or come into the office – and he didn’t. This was a genuine LWP for no work.

For the applicant

[32] The applicant submitted the correct word was ‘coercion’. He was not frightened; rather he was gathering proof and ‘waiting for the right moment’. He said his life was ‘hell’ during his employment at UPC – people were touching his desktop, his bag and nothing was done (I note at this juncture that none of these allegations were in any of the applicant’s earlier statement or materials).

[33] The applicant claimed that during the LWP period, he was making calls to Brazil to try and get students to make applications. He asserted he was brought to Australia and was ‘set up to fail’. He realised this after three months. The applicant seeks an unspecified amount of $23,900 based on emotional stress, and his partner also losing his job because of their linked visas. The applicant claimed he is more than capable of finding another job, and there are plenty of job opportunities with his language skills. However, he must find another visa sponsor to stay in Australia.

CONSIDERATION

Meaning of redundancy

Redeployment

[34] As mentioned earlier, s 389 of the Act expressly defines ‘genuine redundancy’; see: [4] above. The Explanatory Memorandum to the Fair Work Bill 2008 further developed the meaning of ‘genuine redundancy’ as follows:

‘Clause 389 – Meaning of genuine redundancy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

‘[66] The meaning of the word ‘redundancy’ is not fixed and the term will take colour from its context. However, in any relevant context it is the abolition of a position which leads to that position being redundant. The cause of the abolition of the position – whether business restructure, technological advance, loss of contract/ordinary turnover or otherwise – is a separate matter, albeit one which may determine the entitlements of the redundant employee.’

[37] Further, in Hodgson v Amcor Ltd; Amcor Ltd & Ors v Barnes & Ors [2012] VSC 94, Vickery J (‘Hodgson v Amcor’), after summarising the various authorities, arrived at the following conclusions:

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

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

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

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

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

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

[38] In Ulan Coal Mines Limited v John Howarth and others[2010] FWAFB 3488 (‘Ulan Coal v Howarth’), a Full Bench of the Commission held at [19]-[20] that:

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

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

[39] The Full Bench in Ulan Coal v Howarth, after considering relevant authority and the Explanatory Memorandum to the Fair Work Bill 2008, concluded that:

‘It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that (at 308):

What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant… (at 308)

This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists [my emphasis].’ 

[40] In Dibb v Commissioner of Taxation (2004) 136 FCR 388; [2004] FCAFC 126 (‘Dibb’) referred to above, the Federal Court said at 404-405:

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

•  has reallocated duties;

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

•  for that reason, dismisses the employee,

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

44. In the present case, the employer redistributed the duties previously performed by its District Managers and at the same time, added further duties. The job, described by reference to its duties as previously performed by Mr Dibb, ceased to exist. The employer no longer wished to have that job performed by anybody. The work was to be differently distributed. The result was that there was no job for which his skills qualified him. He was “surplus to [AVCO’s] personnel needs”. We consider that the respondent was in error in concluding that Mr Dibb’s dismissal was not by reason of his bona fide redundancy. As a result, the respondent also erred in failing to address the matters prescribed by s 27F. These errors have inevitably deprived Mr Dibb of the benefit conferred by Subdiv AA upon a person receiving a bona fide redundancy payment as part of an ETP.’

[41] It would also seem obvious and entirely understandable that the Commonwealth Parliament considered the history of the meaning of redundancy as expressed in the early authorities, when it crafted the statutory meaning used in s 389 of the Act.

Employer’s obligation to consult

In this case, UPC’s obligation to consult an employee about their possible redundancy arises from the statutory command in s 389(1)(b) of the Act.

[42] The meaning of the word ‘consult’, was considered by the Full Bench in Consultation Clause in Modern Awards [2013] FWCFB 10165 (‘Consultation Clause in Modern Awards’). At [30]-[33], the Full Bench said:

‘[30] The word ‘consult’ means more than the mere exchange of information. As Young J said in Dixon v Roy:

“The word ‘consult’ means more than one party telling another party what it is that he or she is going to do. The word involves at the very least the giving of information by one party, the response to that information by the other party, and the consideration by the first party of that response.” [citations omitted]

[31] The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality. Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):

“... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.

To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation. ...”

[32] We respectfully adopt his Honour’s observations. Similar to the obligation to accord a person procedural fairness, the precise content of an obligation to consult will depend on the context. The extent and significance of a proposed change, in terms of its impact on the affected employees, will have a bearing on the extent of the opportunity to be provided. Hence a change of limited duration to meet unexpected circumstances may mean that the opportunity for affected employees to express their views may be more limited than would be the case in circumstances where the proposed change is significant and permanent. It is also relevant to note that while the right to be consulted is a substantive right, it does not confer a power of veto. Consultation does not amount to joint decision making.

[33] Some of the ordinary incidents of a requirement to consult are reflected in s.145A(2), that is:

•  ‘to provide information about the change; and

•  to provide an opportunity for affected employees to give their views about the impact of the change; and

•  to consider any views about the impact of the change that are given by the employees’(my emphasis)

[43] In Maswan v Escada Textilvertrieb t/a ESCADA [2011] FWA 4239 (‘Maswan’), Watson VP held at [39]:

‘[39] In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in the procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred [my emphasis].’

[44] It hardly needs stating that the word ‘consultation’ is, arguably the most oft debated word in the industrial relations lexicon (perhaps, ‘reasonable’ being another). It has been the subject of considerable judicial and Commission exegesis. That said, it is important to note that despite the views of some uninformed litigants, consultation does not mean agreement. However, nor does it simply mean an exchange of information; nor is it a mere formality or triviality; see: Maswan above. Consultation must be meaningful, open, and transparent and involve a reasonable and realistic consideration of each other’s views.

Redeployment

[45] In Ulan Coal Mines Limited v Honeysett , the Full Bench set out the obligations on an employer in regard to redeployment under s 389(2)(b) of the Act. At [27],[28] and [34] the Bench said:

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

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

…

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

[46] In Technical and Further Education Commission T/A TAFE NSW v Pykett[2014] FWCFB 714, a Full Bench of the Commission held:

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

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

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

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

[47] At the outset, I make a number of observations of the applicant’s evidence and submissions as set out below.

[48] Firstly, the applicant put great emphasis on the LWP request not being signed by the employer; even suggesting that it was fraudulent. This is inconsistent with his other submission that he was ‘forced’, ‘coerced’ or even ‘blackmailed’ into signing it. In any event, the LWP request was made by the applicant himself (whether he was coerced or not). At 1:19am on February 8, 2019 he wrote: ‘Please find enclosed my personal leave request starting today’. Its signing by the respondent was unnecessary, when the fact was that the LWP was accepted and this leave occurred. I do not understand the allegation that it was fraudulent when his signature was on the form. Even so, in the email exchanges between Mr So and the applicant around this time, there is no mention of coercion, threats or blackmail. Rather, it is quite the opposite; their exchanges appear courteous and ‘matter of fact’, without a hint of animus or emotional and financial stress. I consider these allegations to be a false post-reconstruction of events.

[49] Secondly, the applicant highlighted his five years’ experience in the industry, during which he was not restricted to any particular region/s. This is irrelevant; he was specifically engaged to explore market potential in South America and Europe. This is made abundantly clear from his contract letter of appointment, and his permanent employment contract. It reads: ‘Position: Sales and Marketing Manager (South America and European Markets)’. His business experience and the circumstances prior to his nine months’ employment with UPC are not relevant. In fact, it would seem logical that this experience was the very reason he was engaged to undertake the difficult task of breaking into new major markets. Two applications in nine months, one which (United States) was not even from the target market was regrettable, and maybe not the fault of the applicant. It was a big risk for the respondent which did not materialise. This is the reality of the business UPC is engaged in.

[50] Thirdly, the applicant regarded a comparison to the Japanese market results as unfair; see [16] above. The problem with the applicant comparing the Japanese results ($134,000) to his alleged involvement in processing 13 students, and $93,300 in tuition fees is that these fees did not convert to actual income. Only 3 of the 13 applications resulted in successful enrolments, with actual fees of ~$23,000.The Japanese results were actual, realised income.

[51] Fourthly, it is difficult to comprehend how the applicant’s FWO complaint of 13 March 2019 was one of his perceived reasons for his dismissal; see [19] above. This complaint was obviously made after he was given the letter terminating his employment for reasons of redundancy on 8 March 2019 and well after he was pre-warned his redundancy was under serious consideration on 7 February 2019. Given this chronology, the FWO complaint could have not been a motivating factor for the dismissal. It seems to me this is another example of the applicant’s misinterpretation of the facts, which do not coincide with reality.

The LWP request

[52] Notwithstanding that I find the proposition an employee should be asked to work for no pay to save their job (albeit Mr So’s evidence was that he was not asked to do anything in the month of LWP) is a particularly repugnant and totally unacceptable (if not a possible illegal request), I do not consider Mr So or Dr Yu were motivated by any mala fide intent. One should never attribute to malice that which is easily explained by naïveté or ignorance. I believe they were genuine in their intention to keep the applicant ‘on the books’ (after all, they had ‘invested’ a significant amount for little return) to see if he could convert his confidence in securing results into reality. At best, Mr So was naïve and/or ignorant in expecting the applicant to work to get results for no pay, which was essentially the same work he was doing when he was paid in the previous eight months.

[53] That said, I can understand why the applicant may have later felt he was pressured into entering the LWP arrangement. Not only was his future employment in jeopardy, but his visa and his relationship was at risk. In my view, this belated worry manifested itself in some of the more exaggerated and implausible claims he made about fraudulent employer conduct, and forging of documents. Ultimately, these matters are irrelevant to a determination as to whether the applicant’s termination was a genuine redundancy.

[54] Without attempting to second guess the respondent’s motives, in retrospect, it seems to me the respondent would have been better advised to have foreshadowed the possibility of the applicant’s redundancy much earlier; say, a month or two, while the applicant was still being paid. By 8 February 2018, the situation seemed so dire as to be irretrievable. In my opinion, the decision to defer the applicant’s redundancy, while well intended, was based on very unlikely expectations, rather than real business reality. Of course, bad management decisions are made all the time; it is simply a hazard of entrepreneurial risk. However, in this case, the decision not to ‘bite the bullet’ may have been exacerbated by the location of UPC’s senior management in Vietnam and Hong Kong.

[55] I turn now to consider whether the applicant’s dismissal was for reasons of genuine redundancy.

[56] The applicant contends that both legs of s 389 of the Act had not been complied with by UPC. Whether the applicant’s role was no longer required to be performed by anyone, there seems to be an inescapable conclusion in circumstances where the applicant was engaged for a specific purpose which was not fulfilled. His role was unequivocally to target, explore and secure market opportunities in South America and Europe; nothing could be clearer from his contract of employment. He had expressly agreed to a target of 40 students in a year; see [20] above. When after eight months it was two, ‘Blind Freddy’ would have known his specific role was in jeopardy. To argue it was not his fault, and he tried his best, is not the point. To further argue this was a poor management decision is to ignore the reality that regrettably, poor management decisions, even risky ones, will sometimes be reviewed and abandoned. This is inherently the right of any businesses. Sadly, employees are often the collateral damage; hence the protection of the National Employment Standards (‘NES’) in the Act, and other Award and agreement provisions dealing with the personal impacts of a redundancy on an employee and their family.

[57] For these reasons, I am satisfied that the applicant’s job was no longer required to be performed by anyone and accordingly, the termination of his employment was a genuine redundancy.

[58] As to the second leg of s 389 of the Act dealing with whether the applicant could have been reasonably redeployed to a suitable alternative position, the applicant pointed to two employees who were later employed, one as a marketing officer and the other in administration. The authorities make clear that the alternative employment must be available at the time of the dismissal. The two positions arose after the applicant’s dismissal and, as Mr So explained, were not suitable for the applicant in any event. The applicant could not identify any other role he could perform, except for some generalised sales assistance with NEM opportunities. Putting aside these tasks were performed by others, including Mr So himself, this work was haphazard and contingent upon an individual’s workload. In any event, Mr So’s evidence was that the visa requirements specified the applicant was engaged as a Marketing Manager; undertaking this role would have meant displacing someone else in a role for which they could speak the language of the relevant EM country. No such position had existed in the Company’s 20 year history and was inconsistent with its business model to have redeployed the applicant to another person’s specified role.

[59] For these reasons, I am satisfied that it would not have been reasonable to redeploy the applicant to another position at the relevant time. Accordingly, s 389(2)(b) is satisfied. With these findings, the respondent’s jurisdictional objection must be upheld and the applicant’s unfair dismissal application must be dismissed. I would, however, note that the applicant was employed up to 5 April 2019, when his position was made redundant. It is not clear whether the applicant was provided with one week’s notice according to the NES, for his nine months of employment. I do not accept that the one month’s LWP was a true period of notice. Although I cannot order such a payment (as it is beyond the Commission’s jurisdiction), I strongly recommend he be paid a further one weeks’ pay in lieu of notice.

[60] As I mentioned earlier in this Decision, the dispute about unpaid expenses, is a matter the Commission has no jurisdiction to deal with.

[61] The matter is now concluded.

DEPUTY PRESIDENT

Appearances:

The applicant appeared for himself

Mr HK So and Dr KM Yu for respondent

Hearing details:

Sydney:

2019,

11 June.

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