Geoff Johnston v Andy's Earthmovers (Asia Pacific) Pty Ltd T/A Andy's Earthmovers

[2016] FWCFB 3369

[2016] FWC 1828 [Note: An appeal pursuant to s.604 (C2016/3441) was lodged against this decision - refer to Full Bench decision dated 2 June 2016 [[2016] FWCFB 3369] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Geoff Johnston
v
Andy’s Earthmovers (Asia Pacific) Pty Ltd T/A Andy’s Earthmovers
(U2015/14100)

COMMISSIONER RYAN MELBOURNE, 30 MARCH 2016

Application for relief from unfair dismissal - genuine redundancy.

[1] The Applicant, Mr Johnston, filed an application pursuant to s.394 of the Fair Work Act 2009 (the Act) for relief from unfair dismissal on 4 November 2015.

[2] The Respondent, Andy’s Earthmovers, filed an Employer Response on 13 November 2015 in which the Respondent contended that the dismissal of Mr Johnston was a case of genuine redundancy. Directions were issued to both parties requiring both parties to file an outline of submissions and any witness statements dealing with both the jurisdictional issue of genuine redundancy and the merits of the unfair dismissal application.

[3] Directions were issued requiring the parties to file and serve their respective outline of submissions, witness statements and other documentary material that they intended to rely on. The Applicant filed his outline of submissions and his witness statement and sought to have two other witnesses ordered to attend to give evidence on his behalf. The Respondent filed its outline of submissions and other documentary material but chose not to file any witness statements.

[4] The matter was listed for hearing on 16 and 17 March 2016 in Bendigo in relation to both the jurisdictional challenge of genuine redundancy and the substantive merits of the unfair dismissal application. Evidence was given by the Applicant and each of the two persons ordered to attend to give evidence on behalf of the Applicant, Mr Greg Goulden, the Heavy Haulage Manager of the Respondent and Mr Trent Everest, former Managing Director of the Respondent.

[5] The Applicant represented himself and Mr Michael King, National HR Manager of the Respondent represented the Respondent.

Background

[6] The Applicant had been employed by the Respondent and its predecessor owners since May 2002 and was employed as an Office Manager for the Respondent until 1 May 2015 when he transferred from that role to the role of Asset Manager for the Respondent until the date of his dismissal.

[7] The Respondent has a significant business in hiring or leasing earthmoving vehicles to the mining industry and to the construction industry. The Respondent also carries on a business of providing maintenance services to earthmoving equipment and owns and operates its own heavy haulage business. The Respondent is part of a group of companies. As the Respondent has a significant part of its business linked to the mining industry then significant changes in the mining industry have significant impacts on the Respondent. When the mining industry was booming then the Respondent’s business increased. When the mining industry contracted so did the Respondent’s business.

Genuine Redundancy

[8] The relevant provision of the Act is s.389 which is as follows:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

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

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[9] In the present matter it is accepted by both the Applicant and the Respondent that s.389(1)(b) is not relevant as the Applicant was not covered by any award or enterprise agreement.

[10] The Applicant contends that the requirements of s.389(1)(a) have not been met and that his dismissal is not a case of genuine redundancy. The Applicant separately contends that his dismissal was not a case of genuine redundancy because it would have been reasonable in all of the circumstances for him to be redeployed within the Respondent’s business. The Respondent contends that the decision to dismiss the Applicant was taken because of changes in the operational requirements of the Respondent’s business caused by the downturn in the mining industry in Australia. The Respondent separately contended that there were no other positions in the Respondent’s business that the Applicant could be redeployed into.

Consideration

[11] At first glance much of the material filed by and relied on by the Respondent did not provide a solid base for the contention of the Respondent that the dismissal of the Applicant was a case of genuine redundancy. A good deal of the Respondent’s material related to matters which occurred after the dismissal of the Applicant. At first glance the witness statement of the Applicant and the submissions of the applicant painted a reasonably clear picture in which the dismissal of the Applicant was not a case of genuine redundancy. The Respondent’s case was poorly presented given that the Respondent chose not to have anyone give evidence on behalf of the Respondent and to explain the written material on which the Respondent relied.

[12] It is very clear that the Applicant was at a significant disadvantage in this matter given that the Respondent did not consult with the Applicant before the dismissal about the justification for the dismissal. In the absence of any award or enterprise agreement requirement to consult with the Applicant, the Respondent simply had no obligation to do so. But it is the very fact of the lack of consultation which gave rise to the concerns of the Applicant that his dismissal was not a case of being a genuine redundancy.

[13] The two persons who were required to attend the Fair Work Commission (the Commission) and give evidence on behalf of the Applicant provided evidence which greatly assisted the Commission. The evidence of Mr Trent Everest was particularly useful in identifying the business position of the Respondent immediately before the Applicant was dismissed.

[14] Mr Everest had been the Managing Director of both the Respondent and its parent company in 2015. Mr Everest undertook a review of the business in early 2015 which led to a restructure in April 2015. As part of the April 2015 restructure the Applicant was offered the position of Asset Manager as the review highlighted the need for better asset management within the Respondent’s business. Mr Everest undertook the review and restructure in early 2015 in order to consolidate the position of the business and to prepare it for future growth. The evidence of Mr Everest made clear that he got it very wrong in positioning the Respondent’s business for future growth when in fact the business of the Respondent was suffering a decline which became evident after the April 2015 restructure had been put in place. In October 2015 Mr Everest offered his resignation to the Respondent as he considered that the Respondent needed to do more to protect what it had rather than focussing on growth. As Mr Everest put it:

“I felt that that period we needed to do more in terms of protecting what we had rather than focusing on growth and I formed the view that as a catalyst of that change – I'd formed the view that the best person to run the business was Andy. He'd started the business. His name was on the front door and I felt that particularly during the headwinds that we were facing, a more experienced campaigner enabled the best chance of survival for our business. So I went to him and based on that and that was our conversation almost word for word. I submitted my resignation on 2 October, which was accepted by the board on the 5th.” 1

[15] The dismissal of the Applicant on 19 October 2015 must be viewed in the context of the decision by Mr Everest to resign. The April 2015 restructure which created the position of Asset Manager was to position the Respondent for growth. In the face of worsening market conditions it is not surprising that once Mr Everest resigned that the Respondent made the position of Asset Manager redundant. As Mr Everest’s evidence made clear the very rationale for the creation of that position was gone and the Respondent needed to concentrate on survival.

[16] The oral evidence of Mr Everest is consistent with some of the material relied on by the Respondent describing reduced hire out rates for earthmoving equipment and the downturn in the mining sector generally.

[17] It is very clear from the evidence that the creation of the Asset Manager’s role in April 2015 was part of a considered review of the Respondent’s business and an attempt to position the Respondent to deal with maintaining control over its assets in a time of growth. There was nothing in the evidence and material before the Commission which would suggest otherwise. The Applicant accepted the role of Asset Manager when it was created. The removal of the position of Asset Manager less than 6 months after it was created was not a ruse or device done for the purpose of trying to get rid of the Applicant. The removal of the Asset Manager position was consistent with the need of the Respondent to move away from a focus on growth and to concentrate on survival. The operational requirements of the Respondent significantly changed after the Asset Manager’s position was created and the changed operational requirements led to the decision to remove the Asset Manager’s position.

[18] The Applicant gave evidence in this matter and I considered the Applicant to be a truthful person. The Applicant’s own evidence does not undermine the evidence of Mr Everest but rather when considered together the evidence of both Mr Everest and the Applicant support the position of the Respondent.

[19] The Applicant argues that there was an opportunity for him to be redeployed into the role of Heavy Haulage Manager, a position occupied by Mr Greg Goulden at the time of the dismissal. The Applicant’s evidence was that Mr Goulden had resigned his employment on 14 October 2015 by giving 4 weeks’ notice to the Respondent. As the Applicant had previously performed the role of Heavy Haulage Manager then it was a position into which he could have been redeployed. However the evidence of Mr Goulden was that after he had given notice in writing to his manager, Mr Christie discussions were initiated by Mr Christie with Mr Goulden which resulted in Mr Goulden agreeing to stay employed with the Respondent. The discussions with Mr Christie commenced immediately after Mr Goulden had given his written notice of resignation and concluded some time after the 20 October 2015.

[20] The evidence of Mr Goulden makes very clear that 2 members of the management of the Respondent, Mr Rowley and Mr Christie, knew about Mr Goulden’s intention to resign. However, the evidence suggests that Mr Hoare, the effective controlling manager of the Respondent and Mr King, the National HR Manager of the Respondent did not know about Mr Goulden’s resignation email or the attempts of Mr Christie to keep Mr Goulden in employment.

[21] The essence of the Applicant’s contention on this matter is that at the date of his dismissal, 19 October 2015, that there was a position into which he could have been redeployed. This contention must fail in that as at the 19 October 2015, Mr Goulden’s notice of an intention to resign had neither been accepted by the Respondent nor had the period of notice given by Mr Goulden elapsed. As at the date of dismissal of the Applicant the position of Heavy Haulage Manager was not vacant.
[22] The Applicant contends that other persons should have been dismissed before he was dismissed and that if other persons had been dismissed then there would not have been any necessity to dismiss the Applicant. This however is not the question that should be asked or answered. The focus of s.389 is on the reason for the dismissal of the Applicant and whether or not that dismissal is a genuine redundancy.

[23] The Applicant also contends that the dismissal cannot be genuine redundancy because the letter of termination specifically dismissed him from the position of Office Manager, a position he had not held since April 2015. The Commission specifically raised this issue with Mr King at the hearing and I am satisfied that the decision to dismiss the Applicant was on the basis that the position of Asset Manager had been made redundant. The reference to Office Manager in the letter of termination was done by HR having regard to the last written contract of employment on file.
Conclusions
[24] I have considered all of the evidence and submissions in this matter, and conclude that the dismissal of Mr Johnston was a case of genuine redundancy. I am satisfied in relation to s.389(1)(a) that the decision to make the Applicant’s position of Asset Manager redundant was because of changes in the operational requirements of the company. S.389(1)(b) has no relevance in the present matter. I am satisfied that it was not reasonable in all of the circumstances for the Applicant to be redeployed into another position within the Respondent’s business or into a position within an associated entity of the Respondent.

[25] As the applicant's dismissal was a case of genuine redundancy it cannot be an unfair dismissal for the purposes of s.385 of the Act. The application is dismissed.

COMMISSIONER

Appearances:

G. Johnston on his own behalf.

M. King for the Respondent.

Hearing details:

2016.

Bendigo:

March 16.

 1   Transcript at PN 363

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