Geoffrey Kaalverink v Defence Housing Australia

[2021] FWC 1586

[2021] FWC 1586

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Geoffrey Kaalverink
v
Defence Housing Australia
(U2020/14206)

DEPUTY PRESIDENT DEAN SYDNEY, 30 MARCH 2021

Application for an unfair dismissal remedy – whether genuine redundancy – application dismissed.

[1] Mr Kaalverink was employed with Defence Housing Australia (DHA) until he was dismissed for reason of redundancy.

[2] On 28 October 2020 Mr Kaalverink made an application under s.394 of the Fair Work Act 2009 for a remedy, alleging that he had been unfairly dismissed by DHA.

[3] DHA objected to the application on the grounds that the dismissal was a case of a genuine redundancy.

[4] The Commission must determine, by virtue of s.396 of the Act, the question of whether the dismissal was a genuine redundancy before considering the merits of the application.

[5] The matter was listed for hearing by video link on 2 February 2021. At the hearing, Mr Kaalverink was self-represented and DHA was represented by Ms S Wright of the Australian Government Solicitor. Mr Kaalverink gave evidence on his own behalf and Mr Tom Cummins (Head of Property) and Mr Andrew Oliver (Chief HR Officer) gave evidence for DHA.

[6] For the reasons set out below, I find that Mr Kaalverink’s dismissal was a case of genuine redundancy, and he was therefore not a person protected from unfair dismissal.

Background

[7] Mr Kaalverink commenced employment with DHA on 29 January 2015 as an Executive Level 2 (EL2) employee in the position of Regional Development Manager, NSW & ACT. He is based in DHA’s office in Sydney. The Defence Housing Australia Enterprise Agreement 2015 (the Agreement) applied to his employment.

[8] In or about November 2019, DHA began a process of restructuring across its organisation and in February 2020 announced a proposed new operating model. One of the reform initiatives was to consolidate the development regions from three down to two. The new structure would see the existing region of NSW/ACT subsumed into the other two regions, creating a QLD/NSW region and a VIC/ACT/NT/SA/WA region, with developments in the ACT to be managed from Victoria and developments in NSW to be managed from Queensland.

[9] Following meetings in March and June 2020 to which Mr Kaalverink had attended, he was informed in writing on 31 July 2020 that as a result of the new regional portfolio, there was no longer an operational need for an EL2 Regional Development Manager in Sydney, and his position would become redundant.

[10] It is common ground that Mr Kaalverink was offered redeployment to a non-ongoing EL2 role which he considered not comparable and ultimately rejected.

[11] On 7 September 2020 Mr Kaalverink was notified of his redundancy and that the termination was to take effect on 12 October 2020.

Evidence

Mr Cummins

[12] Mr Cummins is DHA’s Head of Property and in this role is responsible for managing a team delivering multiple programs for the organisation including, Developments, Constructions, Acquisitions, Leasing, Property Investment, Disposals, Underperforming Assets, Upgrades and Heritage.

[13] Mr Cummins in his statement detailed the restructuring process undertaken by DHA. He gave evidence that all staff in the Property Group were provided with a Draft Property Group Organisational Structure in March 2020. This was followed by a meeting held in Sydney on 18 March 2020 which was attended by the key Property Function managers and the Regional Development Managers including Mr Kaalverink. The meeting was said to “discuss, establish and refine the changes necessary for the team to increase operational efficiency while maintaining operational effectiveness.” Mr Cummins said that the Regional Development Managers were conscious of the impact on their roles and some managers could see that their roles would not be ongoing in the new structure.

[14] Mr Cummins set out the rationale for the proposed consolidation of the development regions which ultimately led to the abolition of the Regional Development Manager position for NSW and ACT.

[15] Mr Cummins said that following the meeting on 18 March 2020, it became necessary to delay the proposed changes due to the impact of COVID-19. He next met with Mr Kaalverink on 24 June 2020 to canvass the next phase of changes that would be occurring within the Property Group. At this meeting, he informed Mr Kaalverink, amongst other things, that he considered him ideally experienced for the position of Strategic Development Manager which was also at the EL2 classification. Mr Cummins said:

“I offered this role to Geoff at the meeting on the 24 June 2020 and encouraged him to consider accepting it. It was my view, and that of his manager James Wallace, that Geoff's skills, qualifications and experience made him highly suitable for this role. This was because he was recognised as a very experienced development executive with problem solving skills that DHA wanted to retain to assist with some specific project challenges. The new role was relatively free of any major reporting requirements, but otherwise similar to Geoff's current role, albeit with projects spread more nationally. This was considered the best way to utilise Geoff's skill set. I did advise Geoff that it was likely his substantive role would be rendered excess and made redundant as part of the upcoming changes.

The focus of the meeting remained predominantly on the proposed new role. Geoff told me that he was aware change was coming and expressed his desire to remain flexible to stay employed within DHA. I talked Geoff through the role and informed him that it was being offered as a 12 month non-ongoing position. However, I informed him that DHA would continue to support Geoff in obtaining ongoing employment during this period. Geoff raised questions about the expected duration of the role potentially being less than 12 months, to which I advised I was confident the role would be required for 12 to 18 months. I also explained that this new role would not be a permanent one, which was similar to a number of roles created to help facilitate DHA's change to a new business model at that time.”

[16] Mr Cummins went on to say that he had the impression at the meeting that Mr Kaalverink was very interested in the position. It was not until his letter to Mr Brett Jorgensen (General Manager of the Property Group) that be became aware of his resistance to the changes and the alternative role.

[17] Mr Cummins responded to Mr Kaalverink’s criticism that he acted improperly by not informing him upfront that his role was redundant, and explained that he was unable to do so as a formal decision had not been made at the time. He also disagreed with Mr Kaalverink’s claim that the alternative position offered to him was in any way devoid of substance or would likely end sooner than the 12 month timeframe specified. He said: “There was plenty of work to sustain the role for at least the next 12 months. For perspective, the project challenges we were wanting Geoff to focus on in the proposed role have been lingering unresolved for many years to date. This role would not have been supported by the General Manager Service Delivery if the position was devoid of substance or likely to end sooner than the 12 months specified.”

[18] Mr Cummins further added that the use of 12 month non-ongoing roles is common within DHA and particularly within the property group. In fact, the vast majority of the development team (including himself and Mr Kaalverink) have been engaged via non-ongoing contracts with DHA at various times to meet business requirements. Non-ongoing contracts are used when there is no certainty of ongoing requirements beyond the contract term at the time of appointment. However, it does not mean staff are unable to secure other roles that become available during the term of their contract, in alignment with business requirements. Mr Kaalverink’s changing role requirement was not unique to him in that project allocations, regional area boundaries and program management positions are often changing within DHA to adapt to changing business requirements and environmental impacts. This is necessary to ensure the team meet the needs of DHA as it operates in a very dynamic property industry.

Mr Oliver

[19] Mr Oliver gave evidence that in his role as the Chief HR Officer he is responsible for overseeing all aspects of human resource management for DHA. He said that he became involved in the organisational restructuring in or about November 2019 and his task was to provide guidance and support to ensure that the redundancy process adhered to the requirements contained within DHA’s Enterprise Agreement and the Fair Work legislation.

[20] Mr Oliver has the delegation to declare a position redundant; he signs the notice of redundancy and notice of termination given to employees based on the evidence from the business area.

[21] He attested that Mr Kaalverink’s redundancy was genuine as there was evidence of genuine consultations, sufficient business justifications for the redundancy and the business area had followed HR’s technical advice and complied with the EA. Furthermore, a paper was approved by the Managing Director in July 2020 that amongst other things, outlined the restructure and sought approval on the position being offered to Mr Kaalverink and potential redundancies.

Mr Kaalverink

[22] Mr Kaalverink agreed that DHA announced its intention to restructure operations in February 2020 and that presentation and meeting conducted by Mr Cummins was held in March 2020. However, he criticised the lack of details provided as to the impacts on individuals or groups of individuals. He contended that what was conveyed to him was simply that redundancies would likely occur.

[23] Mr Kaalverink said that since the announcement of the restructure, staff members had put the question of whether or not their positions were subject to redundancies to the National Program Manager during team meetings and on each occasion the response was that there were no planned redundancies for the Development team.

[24] As to the redeployment option first offered by Mr Cummins at the meeting on 24 June 2020, Mr Kaalverink said that he initially considered the role extremely attractive until he realised that it was not ongoing. It was only when he rejected the role that Mr Cummins revealed that he would be made redundant and that he should accept it. Mr Kaalverink said that he felt that there was no basis for his current position being made redundant and he again refused the proposed role.

[25] After that meeting, he had numerous correspondence with Mr Cummins and Mr Jorgensen. He said DHA continued to assert that he was redundant and continued to push for him to accept the alternate employment being offered.

[26] Negotiations about the redeployment offer failed and on 2 September he wrote to Mr Jorgensen contending that the offered employment was not comparable and concluded by saying: “If we cannot agree on acceptable terms then I am more than willing to pursue wrongful termination, and to seek reinstatement or compensation and to otherwise sue for contract if you make me redundant.” He did not receive a response from DHA to his letter.

[27] He attended a meeting in Sydney on 7 September 2020 when he was formally notified that he was made redundant with effect on 12 October 2020.

Submissions

[28] DHA submitted that Mr Kaalverink’s dismissal was a case of genuine redundancy. DHA no longer required his job to be performed by anyone because of changes in the operational requirements of DHA, and that it has complied with the obligations imposed by its enterprise agreement to consult about the redundancy. Further, Mr Kaalverink refused an offer of reasonable redeployment and his dismissal was therefore not unfair.

[29] DHA refuted Mr Kaalverink’s contention that a redundancy is not genuine if ‘the job was given to other employees’ and submitted that an employer may still require the employee’s ‘duties’ to be performed, but not require the employee’s ‘job’. It relied on a number of authorities for the proposition that a job is described by reference to the duties attached to it and a redundancy can still be genuine when the duties are redistributed: Dibb v Federal Commissioner of Taxation 136 FCR 388 at [43]-[44]; Ulan Coal Mines Limited v Howarth and ors[2010] FWAFB 3488 at [17]; Fitzjohn v Southern Cross Protection Pty Ltd[2015] FWC 2601 at [119]-[120].

[30] DHA referred to the Explanatory Memorandum to the Fair Work Bill 2008 and highlighted the following:

•  a genuine redundancy may involve “if the employer only needs three people to do a particular task or duty instead of five” (paragraph 1548)

•  a genuine redundancy may involve “tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.” (paragraph 1548)

•  whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. (paragraph 1553)

[31] It was submitted that the evidence was clear that DHA did reduce what was three EL2 positions in regional development manager roles to two, and that the duties Mr Kaalverink was performing were redistributed to two other employees.

[32] DHA submitted that Mr Kaalverink’s argument appeared to be simply that another EL2 employee rather than himself should have been the one that was made redundant. This argument, it submitted, was about which employees of the three substantive EL2 employees ought to have been selected and did not go the genuineness of the redundancy.

Mr Kaalverink

[33] Much of Mr Kaalverink’s submissions dealt with issues and complaints that were not relevant to the application before the Commission.

[34] Mr Kaalverink’s contention that his dismissal was not a genuine redundancy was set out in his written outline of submissions as follows:

“19 The Applicant raises no argument to the Respondents position that it was fully entitled to redistribute the workload assigned to its 3 Regional Management positions, so that the duties could be performed by 2 Regional Managers.

20. The applicant does however content that the Respondent has overreached in its interpretation and use of the second point to Clause 389 s.Cl 1548 of the Explanatory Memorandum to the Fair Work Bill 2008 (EM) – clearly the example where “the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists” is talking to a circumstance where duties of a position (either for single person or a ll of the persons in that same position) are disassembled and distributed to another position/s to the extent that the position no longer exists for the person or any persons in that job function.

This example is very different to the circumstances where an employer’s business or business need is diminishing and they simply need fewer employees in a particular job function, which is the Respondents circumstances exactly.

21. The Respondent had employment contracts for the job of Regional Manager with only 2 of the 3 employees working in the Regional Management positions.

22. The “third employee” was/is employed as a Senior Development Manager and was “acting” in the position of Regional Manager.

23. The Respondent could have avoided the redundancy by simply moving the “third employee” back to the position that he was employed for.

24. The Respondent in giving the Regional Management job to the “third employee” literally gave the Applicant’s job to someone else.

25. The Respondent failed to adhere to the Principles of Consultation set out in section 84 of the DHA Enterprise Agreement and in so doing mislead and denied the Applicant the rights provided by the agreement. Summarily, the respondent failed to consult.

26. Accordingly, the Applicants job was not genuinely redundant.”

[35] In essence, Mr Kaalverink asserted that the redundancy was not genuine because DHA:

•  gave his job to another employee;

•  failed to properly consult; and

•  offered redeployment which was not comparable.

Consideration

[36] Under s.385(d) of the Act a person is not unfairly dismissed if the dismissal was a genuine redundancy. The term ‘genuine redundancy’ is defined in s.389 of the Act:

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.

[37] There are three relevant matters for consideration in determining whether Mr Kaalverink’s dismissal was a case of genuine redundancy, namely:

1. Did the employer no longer require the employee’s job to be done by anyone because of changes in the operational requirements of the employer’s enterprise?

2. Has the employer consulted in accordance with the consultation provisions of a relevant modern award or enterprise agreement?

3. Was it reasonable in all the circumstances for the employee to be redeployed in the employer’s enterprise?

[38] I also note that the process for selecting an individual employee for redundancy is not a relevant question as to whether the redundancy is a genuine redundancy. 1

Did the employer no longer require the employee’s job to be done by anyone because of changes in the operational requirements of the employer’s enterprise?

[39] In considering the question of whether an employer “no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.”, it is well established that the test can be met when job functions are retained but are redistributed.

[40] In Ulan Coal Mines Limited v Henry Jon Howarth and others 2, the Full Bench said:

“[17] 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 p. 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:

‘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 p.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.

[18] In Kekeris v A. Hartrodt Australia Pty Ltd[2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:

‘When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.’”

[41] It is clear in the present case that DHA made a decision to abolish the position occupied by Mr Kaalverink and the functions of his job have been redistributed in accordance with the new regional structure. The reason for the redundancy was clearly communicated to Mr Kaalverink in the letter of 31 July 2020 from Mr Jorgensen which stated the following:

“Following implementation of this decision, there will no longer be an operational need for an Executive Level 2, Regional Development Manager in Sydney and your position would become redundant. The redundancy of the position arises as there are more Executive Level 2 employees than is necessary for the efficient and economical operation of DHA.

After careful consideration of the three employees at the same classification performing similar duties in the development team and the future operational needs, your position was identified as the one no longer operationally required, because

•  the work in the Sydney region is declining,

•  the employees working in the regions where there is an operational need are performing well and have demonstrated the required ability to perform the duties expected of them,

•  the other two Regional Managers have demonstrated a superior ability to work with DHA’s systems and meet DHA governance requirements.”

[42] Having considered the evidence and submissions in this regard, I am satisfied that DHA did not require his job to be performed by anyone because of changes in the operational requirements of DHA.

Has the employer consulted in accordance with the consultation provisions of a relevant modern award or enterprise agreement?

[43] Part J of the Agreement deals with consultation which relevantly provides:

“63. Consultation

63.1 This term applies if the employer:

(i) has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or

(ii) proposes to introduce a change to the regular roster or ordinary hours of work of employees.

Major change

63.2 For a major change referred to in clause 63.1(i):

(i) the employer must notify the relevant employees of the decision to introduce the major change; and

(ii) clauses 63.3 to 63.9 apply.

63.3 The relevant employees may appoint a representative for the purposes of the procedures in this term.

63.4 If:

(i) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(ii) the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

63.5 As soon as practicable after making its decision, the employer must:

(i) discuss with the relevant employees:

(i) the introduction of the change;

(ii) the effect the change is likely to have on the employees; and

(iii) measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and

(ii) for the purposes of the discussion provide, in writing, to the relevant employees:

(i) all relevant information about the change including the nature of the change proposed; and

(ii) information about the expected effects of the change on the employees; and

(iii) any other matters likely to affect the employees.

63.6 However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

63.7 The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

63.8 If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph 63.2(a) and subclauses 63.3 and 61.5 are taken not to apply.

63.9 In this term, a major change is likely to have a significant effect on employees if it results in:

(i) the termination of the employment of employees; or

(ii) major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or

(iii) the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(iv) the alteration of hours of work; or

(v) the need to retrain employees; or

(vi) the need to relocate employees to another workplace;

(vii) the restructuring of jobs.”

[44] I am satisfied that the evidence presented by DHA has demonstrated the process of consultation with Mr Kaalverink met the requirements set out in clause 63 of the Agreement. In particular:

a. Mr Kaalverink was made aware of the proposed restructure in February 2020.

b. Mr Kaalverink had participated in meetings in March and June 2020 to discuss the proposed changes.

c. Mr Kaalverink was informed in writing on 31 July that his position was redundant.

d. Redeployment was offered as an alternative to the termination although it was not accepted.

e. The issues raised by Mr Kaalverink were considered and responded by both Mr Cummins and Mr Jorgensen.

[45] Despite his criticisms, Mr Kaalverink conceded during opening submissions that DHA has met its obligations with respect to the consultation process. 3

[46] Overall, I am unable to discern any basis for a finding that DHA did not consult in accordance with the provisions of the Agreement.

[47] For these reasons, I am satisfied that DHA have discharged the consultation obligation prior to making Mr Kaalverink redundant.

Was it reasonable in all the circumstances for the employee to be redeployed in the employer’s enterprise?

[48] As set out earlier, s.389(2) provides that a person’s 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.

[49] There is no dispute that DHA had offered redeployment which Mr Kaalverink did not accept. In my view, notwithstanding the role was non-ongoing, there was a redeployment opportunity available to Mr Kaalverink that was open for him to accept. I am otherwise satisfied that it would not have been reasonable in all the circumstances for Mr Kaalverink to be redeployed to another position within DHA.

Conclusion

[50] For the above reasons, I am satisfied that Mr Kaalverink’s employment came to an end for reason of a genuine redundancy within the meaning of s.389 of the Act.

[51] As a result, Mr Kaalverink is not an employee who is protected from unfair dismissal and his application under s.394 of the Act must be dismissed. An order dismissing the application will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

G Kaalverink on his own behalf.
S Wright for the Defence Housing Australia

Hearing details:

2021.
By video:
February 2.

Printed by authority of the Commonwealth Government Printer

<PR728036>

 1   See paragraph 1553 of Explanatory Memorandum to the Fair Work Bill 2008.

 2   [2010] FWAFB 3488.

 3   Transcript PN71.