Graham Flint v Illawarra Coke Company Pty Ltd
[2013] FWC 8570
•8 NOVEMBER 2013
[2013] FWC 8570 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Graham Flint
v
Illawarra Coke Company Pty Ltd
(U2013/9720)
Andrew Steinmann
v
Illawarra Coke Company Pty Ltd
(U2013/9908)
COMMISSIONER ROBERTS | SYDNEY, 8 NOVEMBER 2013 |
Applications for unfair dismissal remedy - jurisdictional objection - genuine redundancy - objection upheld - applications dismissed.
[1] This decision concerns two applications lodged on 20 March and 21 March 2013 by Mr Flint and Mr Steinmann (the applicants) respectively, pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the alleged unfair terminations of their employment by Illawarra Coke Company Pty Ltd (ICC or the Company).
[2] The Company raised a jurisdictional objection arguing that the dismissal of each applicant was for genuine redundancy and therefore was not an unfair dismissal. The joined matters were set down for jurisdiction and arbitration hearing in Sydney on 2 September 2013. Directions were issued for the filing of written submissions, witness statements and any supporting documents. That process was completed on or about 26 August 2013.
[3] At the hearing the applicants were represented by Mr T Slevin of Counsel with Ms J Gray of the Construction, Forestry, Mining and Energy Union (CFMEU). The Company was represented by Mr P Ludeke of Herbert Geer Lawyers. Both applicants gave sworn evidence and Mr R Timbs (a District Vice President of the CFMEU) gave sworn evidence for the applicants. Mr R Wright (Managing Director) and Ms Churchill (General Manager) gave sworn evidence for ICC.
Background
[4] At the time Mr Flint and Mr Steinmann were employed by ICC, the Company operated Coke Works at Corrimal and Coalcliff in the Illawarra region of New South Wales and had done so for some one hundred years. The Company “produces premium grade metallurgical and foundry coke which is sold in Australia and overseas to base metals producers for use in steelworks, foundries and smelters.” 1 The Coalcliff works closed in late June 2013 and the operations of that site were merged with those at Corrimal. Some 19 employees were made redundant out of a total of some 46, 15 redundancies being voluntary and the remainder forced. The redundancies included workers from both sites. Some of the former Coalcliff employees were redeployed to Corrimal.
[5] The applicants were among the four employees who were made forcibly redundant. Those employees who volunteered for redundancy worked until the Coalcliff site closed but the employment of Mr Flint and Mr Steinmann was terminated at the initiative of the Company on 30 April 2013. The applicants claim that their terminations did not occur by way of genuine redundancy because the required level of consultation did not occur and, further, that they were guaranteed work at Coalcliff until the site closed. The Company maintains that the employment relationship between it and Mr Flint and Mr Steinmann ended as a result of genuine redundancy and therefore their applications for relief pursuant to s.394 of the Act are jurisdictionally barred.
Legislative Framework
[6] Sections 385 and 389 of the Act provide:
“385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
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.”
[7] The Explanatory Memorandum to the Fair Work Bill 2008 (Explanatory Memorandum) provides to state the meaning of genuine redundancy as follows:
- 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.
“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:
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 a 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.”
[8] The enterprise agreement which applied to the applicants’ employment was the Illawarra Coke Company Pty Ltd Enterprise Agreement 2010 (the Agreement).
[9] Clauses 11 and 25 of the Agreement provide:
“11. CONSULTATION
The Company will consult with the employee's site representatives on any matters of workplace importance. This commitment to consultation does not confer on employees or their representatives any right of veto.”
25. REDUCTION IN EMPLOYEES
Any reduction in employee numbers will be decided consistent with the needs of the operation. Prior discussion will be held with the Employee's Representatives if any reductions are to occur.
In the event of termination of employment brought about by reason of redundancy, retrenchment or business closure the following payments will apply: -
a) Where the employee has been employed for a period up to 4 years -
1 - 2 years service 4 weeks pay
2 - 3 years service 6 weeks pay
3 - 4 years service 7 weeks pay
b) Where the employee has been employed for a period of more than 4 years, payment will be at the rate of 3 weeks pay for each complete year of service.
c) 4 weeks notice (or 5 weeks in the case of an employee who has more than five years service and is over 45 years old) of redundancy or retrenchment will be given, however where circumstances do not allow this to happen, 4 weeks payment (or 5 weeks payment, if applicable) in lieu of notice will be made.
d) No payment under this clause shall exceed the amount that the employee would receive had they remained in the employ of the Company until the age of 65 years.
This clause is intended as the consultation term for the purposes of the Act.”
Evidence
Mr Wright
[10] Mr Wright gave sworn evidence and submitted two witness statements 2.
[11] In his primary witness statement, Mr Wright said that he has been Managing Director and Chief Executive Officer for 16 years.
[12] Mr Wright’s statement goes on to say that, due to economic reasons, by October 2011 it was necessary to halve coke production and he informed employees on 24 October 2011 as to the reasons. Recruitment of new employees was then frozen and departing employees were not replaced. On 19 and 20 June 2012 he briefed employees at both sites on the Company’s performance and the need to control costs and manning levels. A further meeting was held at both sites on 31 October 2012 to provide an update to employees and to inform them that the ICC Board was considering the closure of either Corrimal or Coalcliff. A further meeting was held with employees at both sites on 12 December 2012 to provide a further economic update and to inform employees that the Board had decided to close Coalcliff and combined its operations with those of Corrimal. “I outlined the voluntary redundancy process that would be put in place, and that if there were insufficient volunteers there may be the need for involuntary redundancies. On the basis I indicated that there would be a selection process conducted by ICC, with employees to be assessed under and ranked against objective criteria.”
[13] Mr Wright went on to say that a further meeting with employees occurred on 17 April 2013 after prior consultation on a number of occasions with the CFMEU. At that meeting, he told employees that all applicants for voluntary redundancies would be accepted and that there was likely to be a further three or four involuntary redundancies. Advice from Centrelink and a financial adviser was provided to the employees.
[14] Mr Wright said that he met with Mr White and Mr Timbs on 4 July 2012 to discuss ICC’s economic situation and followed up that meeting with a letter to the Union on 17 July 2012 confirming the discussion. He dealt directly with the CFMEU in accordance with clauses 11 and 25 of the Agreement. On 31 October 2012 he emailed Mr White and Mr Timbs to advise of the closure of one of the two works. He telephoned Mr White on 12 December 2012 “to tell him that I was in the process of informing employees that day of the decision to close the Coalcliff works.” He then supplied Mr White and Mr Timbs with a copy of a press release relating to the closure.
[15] “Local media in the Illawarra were of course very interested in the story of the intended closure of the Coalcliff works. The Illawarra Mercury reported extensively on 13 December 2012 of the announcement of the closure the previous day. Mr White was reported by the Illawarra Mercury as saying that the CFMEU had been in talks with ICC for some time about the possibility of the closure. Mr White is quoted as saying: ‘We knew what was coming. We’ve been in consultation with them for some time and we’ve worked amicably together to reach the outcome. We were just waiting for the announcement.’ … Also quoted in the Illawarra Mercury report is Mr Brett Hassall [a CFMEU delegate], who is reported as saying of the closure of the Coalcliff works: ‘The company kept us well informed and in that respect it wasn’t a shock, because we knew it was coming.’”
[16] Mr Wright went on to say that he exchanged emails with Mr White and Mr Timbs on 13 December 2012 informing the Union that ICC had advised employees of the Company’s intention to combine the workforces from the two sites and to select the best candidates from both to be retained after voluntary redundancies had been decided. “In other words, while it was the Coalcliff works that was closing, we decided that to be fair the selection for involuntary redundancies if they were needed would not be restricted only to Coalcliff.”
[17] Mr Wright said that he met with Mr White on 17 January 2013 and “discussed the selection criteria that that ICC intended to use for involuntary redundancies, were they to be necessary, and provided him with a copy of the selection criteria worksheet we intended to use.” On 18 March 2013 he again met with Mr White and Mr Timbs and other persons, including Mr Flint in his role as a CFMEU delegate. That meeting again discussed entitlements for redundant employees and the assessment method for involuntary redundancies. “The CFMEU did not raise any issues with ICC at any time regarding the selection criteria used.”
[18] On 21 March 2013, he emailed Mr White and Mr Timbs about the calculation of severance payments and advising them that expressions of interest for voluntary redundancy would be called for in the following week. Mr Wright went on to say that in addition to the meetings discussed above, he also had other informal contacts with the CFMEU. “The CFMEU did not suggest to me or anyone else at ICC at any time that the consultation with it over the intended reorganisation of operations or the closure of Coalcliff had not been adequate or had not been in accordance with the Agreement.”
[19] Mr Wright’s statement went on to comment on the applications of Mr Steinmann and Mr Flint. In relation to Mr Steinmann, he said that only one electrician was required at each of Coalcliff and Corrimal from the end of April 2013 until Coalcliff was to close in June 2013. One electrician was to be responsible for both sites following the closure of Coalcliff. There were no vacant positions to which Mr Steinmann could have been redeployed as a total of 19 employees were to be made redundant out of a total workforce of 46. Mr Steinmann was assessed as an electrician and that position was no longer required.
[20] Mr Wright rejected Mr Steinmann’s allegation that ICC failed to follow proper procedure in effecting the redundancies. “The CFMEU as employee representative did not raise with ICC on Mr Steinmann’s behalf that there had not been consultations required by the Agreement, or that there had not been appropriate consultation beyond what is required by the Agreement.”
[21] Mr Wright went on to say that: “At the several briefings I held with employees at the two sites I encouraged them to ask questions at the time, and also to approach their Operations Manager or me if they later thought of any matters they wanted to raise. Mr Steinmann did not approach me for that purpose, nor did he approach his Operations Manager at any time.”
[22] In relation to Mr Flint’s application, Mr Wright replied that the selection process used to determine involuntary redundancies was objective and Mr Flint was present at the meeting of 18 March 2013 “as an employee representative and CFMEU delegate where the selection method for involuntary redundancies was discussed amongst other issues.” He went on to say that the reduction in maintenance requirements at Coalcliff meant that the need for Mr Flint’s position at Coalcliff ended as at 30 April 2013 and there were no vacant positions into which Mr Flint could have been redeployed. “I consulted with the CFMEU on the fact that ICC intended to assess employees against the redundancy selection criteria as either a tradesman or as coke worker, so Mr Flint was assessed as an electrician not as an employee of a given classification level who could also perform roles in lower classification levels. Mr Flint was aware of that from having attended the meeting of 19 [sic] March 2013 as a CFMEU delegate.”
[23] Mr Wright’s second witness statement dealt with his reply to the statement of Mr Timbs and his further reply to the evidence of Mr Flint and Mr Steinmann.
[24] In relation to Mr Timbs’ evidence, Mr Wright said that he did not recall Mr Timbs saying at the meeting on 18 March 2013 that the CFMEU ‘would need to see [ICC’s] selection process to ensure that it was fair and transparent’. Mr Wright went on to say that he had provided the selection criteria worksheet to Mr White on 17 January 2013 and therefore the Union was already aware of the criteria. Mr Wright also disputed that Mr Timbs was ‘very clear’ about seeing that selection criteria before any forced redundancies occurred. As stated before, Mr Wright said that he had provided this material to Mr White much earlier.
[25] Mr Wright went on to dispute Mr Timbs’ evidence that there had been no consultation other than the meeting of 18 March 2013. “I had many consultations in meetings or by telephone with Mr White and/or Mr Timbs, and other contacts by email.”
[26] Mr Wright further said that in several meetings with employees he had mentioned that those taking voluntary redundancy would have to stay until the Coalcliff works closed to receive their entitlements.
[27] In relation to Mr Flint’s evidence, Mr Wright said that Mr Flint was employed as an electrician in 2005, not an electrician/production worker although he was expected to perform any role for which he was qualified or trained when required. He went on to say that the announcement that Coalcliff would close was made to employees on 12 December 2012, not at the end of January 2013 and that expressions of interest for voluntary redundancy were called on 27 March 2013 and closed on 5 April 2013.
[28] Mr Wright went on to challenge the veracity of Mr Flint’s evidence in relation to what was said by Mr Wright to employees at various meetings.
[29] In relation to the evidence of Mr Steinmann, Mr Wright challenged Mr Steinmann’s recollection as to when employees were informed of the closure of the Coalcliff site and his further recollection that employees would have to work until the site closed to receive redundancy entitlements.
[30] “It is untrue that I ‘assured’ Mr Steinmann that ‘any forcibly retrenched employees would remain on site for as long as it remained open’. I did not have any one-to-one discussion with Mr Steinmann. I did not ‘assure’ employees collectively that ‘forcibly retrenched employees would remain on site for as long as it remained open’, nor did I say anything to the effect of those words to the CFMEU.”
[31] In cross-examination, Mr Wright:
● Agreed that there were not any further meeting with Mr Timbs after that of 18 March 2013. 3
● Said that by 18 March 2013, he had formed a judgment that there would need to be forced as well as voluntary redundancies although voluntary redundancies had not been called for at that stage. 4
● Agreed that the 18 March 2013 meeting turned out to be the final meeting for the purpose of consultation with the CFMEU. 5
● Went on to say that Mr Timbs had not requested any further consultation. 6
● Agreed that the Coalcliff site continued operating after the forced redundancies of the applicants. 7
Ms Churchill
[32] Ms Churchill gave sworn evidence and submitted a witness statement 8.
[33] In her statement, she said that she has held her current position for one year and has worked for ICC for a total of eleven years.
[34] Ms Churchill’s statement goes on to reply to that of Mr Flint. She said that she was present on 30 April 2013 when Mr Flint was advised of his redundancy. To the best of her recollection, she remembered that Mr Lore said words to the following effect: “As you know Graham, the Coalcliff Cokeworks is closing. We have looked at the number of people required to run the Corrimal Cokeworks. We have also looked at the number of voluntary redundancies that were applied for. The remaining employees were rated using an objective worksheet of skills and other attributes. We have decided to only have one electrician at Corrimal, and unfortunately, Graham, your services are no longer required by ICC. Your last day will be today. You will be accompanied as you say goodbye to your colleagues and collect your personal equipment and other belongings. You will need to hand in all of your keys, your radio and any other company property. I have a copy of your estimated payout figure, which includes 5 weeks in lieu of notice.”
[35] Ms Churchill went on to say that Mr Flint’s evidence that he had said words to the effect: “We haven’t had any consultation over this, what selection criteria did you use to come up with this decision”, did not occur.
[36] Mr Flint had asked why he could be regarded as surplus when people with lower skills were being retained. Mr Lore had told him that he was not required as an electrician in the future and that after comparing ‘trades with trades’ and ‘production workers with production workers’ the result was that he was no longer required.
[37] Ms Churchill went on to say that Mr Flint’s evidence that calculation sheets for redundancy payments for Mr Steinmann and him were visible at the 30 April 2013 meeting was not true. “I had ensured before Mr Flint entered the room that there could not be information related to other employees visible.”
[38] In cross-examination, Ms Churchill was questioned extensively about the operations at the Coalcliff site and the composition of its workforce. 9
Mr Timbs
[39] Mr Timbs gave sworn evidence and submitted a witness statement 10. Mr Timbs’ statement initially set out his history in the coal industry and with the CFMEU.
[40] The statement went on to say that he was first advised by email on 31 October 2012 11 that one of ICC’s Coke Works would potentially be closing. Then on 12 December 2012 he was advised that the Coalcliff Works would close and that the workforce at the Corrimal and Coalcliff Works would merge, with employees having an equal opportunity for ongoing employment at Corrimal.12 On 27 February 2013 he and the CFMEU District Secretary met with members of Corrimal and Coalcliff CFMEU Lodges and discussed a number of matters including the selection process for redundancy and redundancy entitlements. On 18 March 2013 he together with the District Secretary and CFMEU Delegates met with Mr Wright and the Company Accountant to commence consultation. “We talked about the redundancy payouts and compliance with the EA. We confirmed that voluntary redundancies would be treated the same as any forced. We asked for the numbers at the Corrimal plant and how the selection process would occur for on-going jobs. I said to [Mr Wright] that we would need to see their selection process to ensure that it was fair and transparent. At this stage the company had not opened VRs. Rex said they needed to investigate further once they had VR numbers before being able to decide how to operate the Corrimal plant and would come back to us on the other questions once this was done.”
[41] On 21 March 2013, he received an email from the Company 13 with its response to various questions from the CFMEU as to entitlements on redundancy.
[42] “It was my understanding that following the duration of the VR process the company would decide the numbers and which electricians and other tradesmen could go and how they intended to man and run Corrimal so they could decide which VR applications they would accept. Both myself and Graham White [District Secretary] had made it clear to the company that we expected to be consulted and have input into the number and positions to be left at Corrimal and definite advice of those that would be going. I was very clear that if there was to be any forced redundancies that I wanted to see the selection criteria to ensure that a transparent process would occur beforehand.”
[43] “The next contact I had from the company was an email on 30 April 2013 stating that 3 forced redundancies had occurred. There was no consultation other than the meeting of 18 March 2013 referred to above.”
[44] Also on 30 April 2013, he was telephoned by a Union representative at the Corrimal site and informed that the Company had forcibly retrenched three Trade/Production workers, including Mr Flint.
[45] “The following day I contacted Graham Flint and a few days following this I contacted Andrew Steinmann. The third employee, Chris Giles, had accepted his termination of employment. Andrew was angry that the plant would be running past his termination date as all employees were supposed to be made redundant on closure and his job was still there. I understand that there were employees taking VRs at both sites who would have liked an earlier finish date and had the company consulted with the Union before terminating the three members, this and various other important issues could have been discussed.”
[46] In cross-examination, Mr Timbs:
● Denied that there was consultation between the Company and the CFMEU concerning forced redundancies. He went on to say: “The consultation I had with the company was in March, and that was after we asked the company to consult with us with regards to working out remuneration payments for the voluntary retirement. At that stage, 18 March, which was the last meeting I had with the company, I wasn't aware that there was going to be any actual redundancies, it was actually in theory at that stage as expressions of interest hadn't been put out for voluntary retirement.” 14
● Said that he was not aware of any other meetings with the Company. 15
● Said that he had no recollection of a meeting with Mr Wright on 4 July 2012. 16
● Agreed that Mr Wright had kept the Union informed regarding the operation of the Coke Works but “I never had the opportunity to put a case forward for the three members and they being made redundant because I was never aware of any redundancies.” 17
● Was asked: “So you accepted that following the voluntary redundancy process the company would decide the numbers and which electricians and other tradesmen would go - could go and how they intended to man and run Corrimal. You accepted that decision was the company’s?” and said: “Yes.” 18
● Said that he had asked Mr Wright for the selection criteria to be applied in the redundancies but was unaware that Mr White was already in possession of that material, having been supplied it by Mr Wright. 19
● Said that he could not say if Mr Wright and Mr White had met in January 2013 to discuss the selection criteria. 20
● Agreed that Mr White did not mention at the meeting on 18 March 2013 that he was in possession of the selection criteria. 21
● Stated that he personally never received the selection criteria. 22
● Said that after 18 March 2013 he did not discuss the criteria because he was not aware that there were going to be any forced redundancies. 23
● Said that he was happy with consultation on 18 March 2013 in relation to voluntary redundancies. 24
● Was asked: “So to summarise, sir, between 18 March and 30 April you did nothing in relation to contact with the company, did you?” and said: “Like I said, I had no cause to, I wasn't aware there was going to be any forced redundancies. I believed that the company was, at that stage, out with expressions of interest for voluntary retirement.” 25
● Agreed that he did not make contact with the Company when the Applicants were made redundant on 30 April 2013. 26
● Said that, to his knowledge, only one employee approached Mr Wright to ask for an earlier release from employment. 27
● Said that he was not aware when the Applicants were made redundant whether there were vacant positions in the Coalcliff Works or not. 28
● Later said that he knew that there were no vacant positions at Coalcliff or at Corrimal. 29
● Agreed that consultation is a two way process. 30
● Said that the ICC redundancies “would have to be the worst consultation I've ever had with a company with regards to redundancies.” 31
● Said that ICC “started consultation and never finished it.” 32
● Agreed that clauses 11 and 25 of the Agreement said nothing about forced redundancies. 33
[47] In re-examination, Mr Timbs reiterated that:
“We never had the opportunity to have any input into the matters pertaining to those [forced] redundancies.” 34
Mr Flint
Mr Flint gave sworn evidence and submitted a witness statement 35. In his statement, Mr Flint said that he was employed by ICC at Coalcliff from August 2005 until 30 April 2013 as an electrician/production worker. During the last few years of his employment, he was a representative of the CFMEU. The statement goes on to set out details of Mr Flint’s work history and employment prior to working at ICC and his duties at Coalcliff.
[48] He went on to say: “I believe it was approximately 6 months prior to closure date that we heard that it was going to happen. We were not advised which site was going to close but that it would be necessary to close either Corrimal or Coalcliff. I recall being addressed by Rex Wright, the Manager in December 2012 in the crib room, where we were advised that the financial state of the company was grim and that they would be making a decision on which site to close in the coming year. They were not sure at that stage which site it would be or when it would occur. He announced that VRs would be offered. As I was the joint Union representative, along with Brett Hassell, I believe that I asked what would happen if they did not receive enough VR applications. Rex said that unfortunately forced redundancies would occur. There were employees on site with over 40 years service and [Mr Wright] advised that they were to be treated equally to all other employees in terms of remuneration. I asked whether employees who did not apply for a VR and were forcibly retrenched would be penalised and [Mr Wright] replied that they would not be. He said that all workers retrenched would be treated the same and work till closure.”
[49] Mr Flint said that the workforce at Coalcliff was informed by Mr Wright in January 2013 that it was to close. Initially the closure was scheduled for May 2013. “We were told by [Mr Wright] that there would be a selection criteria used to determine who would be transferred to Corrimal for on-going employment. I believe there was a matrix of skills to be involved but the Union had no consultation on this. We were told it would be an objective skills based method and done according to the needs of Corrimal.”
[50] Expressions of interest in voluntary redundancy were opened in early April and closed around Easter. All employees were issued with estimates of potential redundancy payments. A meeting with the Company on 18 March 2013 discussed possible discrepancies in the Company’s calculations. “During the course of the meeting Bob Timbs, the Union's District Vice President raised the question of how employees would be selected for forced retrenchment and for the jobs at Corrimal. We were advised that it would be objective and based on the skills required at Corrimal.” Mr Flint went on to say that the Company did not consult further with the CFMEU before terminating the employment of three employees from Coalcliff. This occurred some seven weeks before the Works shut down.
[51] Mr Flint said that on 30 April 2013 he had worked half his shift and was on a lunch break when Mr Lore (Production Manager) told him that his service was no longer required at either Coalcliff or Corrimal and that his employment would be terminated immediately. He would be paid five weeks pay in lieu of notice plus his redundancy entitlements. He then said to Mr Lore words to the following effect: “We haven't had any consultation over this, what selection criteria did you use to come up with this decision.” He also saw a document showing the calculation of redundancy pay for himself and Mr Steinmann. “I asked [Mr Lore] how they intended to run Corrimal with only one electrician/production worker and he replied that they might just use a contractor if he was off on leave or sick.”
[52] “I understand that the day following [Mr Steinmann] and my termination that a contractor from Benco Electrical Contracting was on site carrying out our work and after that the electrician/production worker from Corrimal was doing it until the closure of the cokeworks. The electrical apprentice from Corrimal was also at Coalcliff doing our job from time to time until closure. I am also aware that there was overtime worked on most days from when we were terminated till the closure and that an electrician had to be there for all production overtime. [Mr Lore] subsequently took a VR and went to work for an electrical contractor, Steve Benco.”
[53] “Prior to my termination I believed that all employees would remain until the end. Rex Wright stated on several occasions that in order to be entitled to a redundancy you had to work at Coalcliff until closure. I had shortened a period of leave I was taking in order to be on site and not create any manning problems leading up to the closure.”
[54] In cross-examination, Mr Flint:
● Agreed that on or about 12 December 2012 he was told by Mr Wright that the Coalcliff site would close. 36
● Agreed that Mr Wright did not make a distinction between voluntary redundancy and involuntary redundancy. 37
● Said that Mr White did not tell him about the selection criteria for redundancy or about a meeting he had with Mr Wright on 17 January 2013. 38
● Agreed that Mr White did not mention the selection criteria at the meeting with the Company on 18 March 2013. 39
● Said that he was at a meeting with all employees at Coalcliff on 17 April 2013 but did not know what the forced redundancy criteria were and did not raise the issue with the CFMEU. 40
● Agreed that Mr Wright told employees on 17 April 2013 that there would be three or four forced redundancies. 41
● Maintained that he saw Mr Steinmann’s name on a sheet of paper on the desk on 30 April 2013 but agreed that he did not see any redundancy payment calculations. 42
● Agreed that contractors were sometimes used at both sites. 43
Mr Steinmann
[55] Mr Steinmann gave sworn evidence and submitted a witness statement 44. In his statement, Mr Steinmann said that he had been employed by ICC at Coalcliff as an electrician/production worker from January 2004 until 30 April 2013. He commenced at Coalcliff as an apprentice electrician. The statement went on to set out Mr Steinmann’s work history and his duties at Coalcliff.
[56] Mr Steinmann went on to say that he recalled being addressed with other employees by Mr Wright in October 2012 when he advised them that one of the two sites would need to close to allow the Company to remain viable. In December 2012 Mr Wright advised employees that the Coalcliff site would close: “He advised us that VRs would be offered at both sites and that the positions at Corrimal would be filled with the remaining employees. He said that if there were not enough VRs received there would be a need for forced retrenchments. At no stage were we advised of the number of VRs required to prevent forced retrenchments. He advised that the employees who were over 65 years of age would be treated in the same way as all other employees and would receive the same method of redundancy pay.”
[57] Mr Steinmann recalled Mr Flint asking whether those facing forced redundancy would be treated the same as those who volunteered. Mr Wright had said that all redundant employees would be treated the same and that no employees were to be let go earlier than the closure date. Expressions of interest in voluntary redundancy were open for a two week period during April 2013. “Following the closing date Rex Wright addressed us in the crib room and advised us that all VRs had been accepted but it was likely a few forced redundancies would occur. He did not advise us of how the decision of who was to go would be made and no timeframe was given. The mood of the workforce following this was extremely down and uncertain. At this stage we were under the impression from [Mr Wright’s] previous statements that whoever was chosen to go would be terminated at the same time as the rest of the workforce.”
[58] Mr Steinmann’s statement goes on to deal with a number of work-related issues, including two written warnings which he received. Where it is relevant, I have paid regard to those issues in my consideration.
[59] The remainder of Mr Steinmann’s statement deals with the events of 30 April 2013 and his belief that he had been treated harshly: “I had been assured by [Mr Wright] that any forcibly retrenched employees would remain on site for as long as it remained open. I am aware that the Corrimal electrician/production worker and the electrical apprentice were brought in to do [Mr Flint] and my jobs until Coalcliff closed after [Mr Flint] and I were terminated. I believe that I was denied my full financial entitlements by being terminated earlier than the rest of the workforce and feel that this is unfair.”
[60] In cross-examination, Mr Steinmann maintained that he held “an impression in my mind that stuck with me the whole time” that Mr Wright had said that no employees would be allowed to go earlier than the closure date of Coalcliff.” 45 He went on to agree that Mr Wright had not actually said that voluntary and forced redundancy would all only occur on the same date.46 When pressed, Mr Steinmann said: “I was not personally assured but going by the statements have been treated equally, or the same as the VR's, that's my impression I had. So obviously not assured but under the impression.”47
Submissions
[61] Prior to the arbitration hearing, the CFMEU filed two outlines of submissions 48. The Company also filed an outline of submissions prior to the arbitration49.
[62] In its submissions, the CFMEU argued that the termination of the applicants’ employment did not constitute genuine redundancy as it did not meet the requirements of s.389 of the Act in that “the Respondent had not completed the consultation required under the Agreement at the time of the dismissal and the Respondent still required others to perform the work that the Applicants performed at the Coalcliff operations between 30 April 2013 and 21 June 2013.”
[63] The CFMEU went on to argue that the dismissals were harsh, unjust and unreasonable because there was no valid reason for terminating the employment of either Mr Flint or Mr Steinmann as the Coalcliff site did not close until 21 June 2013.
[64] “The Applicants were subjected to differential treatment when they were dismissed on 30 April 2013. Employees who were made redundant as a result of the closure of the Coalcliff operations worked until those operations closed on 21 June 2013. During that period they received their usual remuneration including bonus as well as additional overtime. The Respondent had made representations to the workforce that all employees would be able to continue working until closure. The Applicants had worked for the Respondent for 8 years and 9 years. The Respondent dismissed the Applicants on 30 April 0113 without notice and mid-shift. They were required to immediately clear out their lockers and belongings and were escorted from the site. The Applicants were denied an opportunity to work and earn remuneration from 30 April 2013 until the Coalcliff operations closed. This opportunity was valuable in circumstances where their jobs were to be made redundant when the operations closed.”
[65] The CFMEU further submitted that the dismissals of the applicants arose in the context that there was no consultation in which the Company advised that it was considering dismissing some employees prior to 21 June 2013. The applicants and their representatives were not given an opportunity to say anything about the terminations. The submissions further argued that there was work which could have been performed by the applicants between 30 April and 21 June 2013 and it would have been responsible for ICC to have redeployed them within its enterprise.
[66] In its written outline of submissions, ICC argued that the termination of each applicant was the result of genuine redundancy within the meaning of s.389 of the Act. The Company relied on the evidence of Mr Wright as to consultation with employees and the CFMEU in terms which satisfied the requirements of both the Act and the Agreement.
[67] Dealings specifically with each application, ICC argued that in the case of Mr Steinmann: “in the context of the redundancy of 19 employees across the Respondent’s two sites, and its requirement for only one electrician when it had previously required four, the Respondent no longer required Mr Steinmann’s job to be done by anyone because of changes to its operational requirements.”
[68] “The Agreement did not require consultation with Mr Steinmann individually. In the event, Mr Steinmann was kept informed through five briefings of employees by Mr Wright. Mr Steinmann’s contention that he was not consulted is misconceived. The Respondent complied with its consultation obligations under the Agreement. Mr Steinmann’s contentions that the selection criteria used to select him were not appropriate are also misconceived. The selection criteria were discussed with the CFMEU as part of the consultation. Selection criteria or processes are not an issue for consideration as to whether a dismissal is a ‘genuine redundancy’. Mr Steinmann’s suggestion that he could be redeployed into ‘production level tasks’ is not redeployment into a vacant position as contemplated by s.389(2) of the Act. Mr Steinmann’s assertion is an argument that another employee should have been made redundant rather than he, and does not derogate from the factual circumstances that the termination of his employment was a case of genuine redundancy.”
[69] In relation to Mr Flint’s application, the Company argued in similar terms as to its requirement for only one electrician when it had previously needed four.
[70] The submissions went on to argue that Mr Flint was the subject of the same objective assessment as all other affected employees and that the assessment process was the subject of consultation with the CFMEU, of which Mr Flint was a delegate. “The CFMEU did not raise with the Respondent that the assessment process miscarried in respect of Mr Flint or more generally in respect of any other employees.”
[71] The submissions went on to argue in relation to consultation in similar terms to those relating to Mr Steinmann’s application.
[72] “Mr Flint’s contention that he ‘was more qualified than many employees who have been retained’ by the Respondent is also misconceived. Selection criteria or processes are not issues for consideration as to whether a dismissal is a ‘genuine redundancy’. Mr Flint’s contention that he was ‘more qualified’ than any other unidentified employee does not derogate from ‘genuine redundancy’ as the reason for dismissal, and is merely a contention that another employee should have been made redundant rather than Mr Flint.”
[73] I have also paid regard to the final oral submissions made by each side and to the case law cited by the parties.
Conclusions and Findings
[74] It is clear from the provisions of s.389 of the Act that genuine redundancy can only occur if ICC has complied with the consultative obligation contained in clauses 11 and 25 of the Agreement. The Explanatory Memorandum also makes this point at paragraph 1550. Commission decisions have consistently paid close regard to the consultative obligation when determining whether a genuine redundancy has occurred within the meaning of s.389. See for example in UES (Int’l) Pty Ltd v Harvey 50and in Maswan v Escada Textilvertrieb T/A ESCADA51.
[75] In the case of redundancies effected by ICC, I am fully satisfied and find that the Company met its consultative obligations to a high standard. In this regard, I strongly prefer the evidence of Mr Wright where it conflicts with that of Mr Timbs, Mr Flint and Mr Steinmann.
[76] I specifically accept Mr Wright’s evidence as to the supply of the selection criteria for redundancy to the District Secretary of the CFMEU on 17 January 2013. Mr Wright was entitled to proceed after that date on the basis that the Union would raise any issues relating to those criteria if it felt the need to do so. I further accept the evidence of Mr Timbs, Mr Flint and Mr Steinmann and they had no knowledge of the selection criteria when they met with the Company on 18 March 2013. The fault for that cannot be laid at Mr Wright’s door. How the District Secretary handled the information provided to him was an internal matter for the Union. The District Secretary was not called to give evidence.
[77] In the case before me, there is no dispute that the economic and operational needs of the Company meant that it needed to close one of its two Coke Works and that this inevitably meant that redundancies would occur. The Company commenced consultation with both the CFMEU and its workforce at an early date and they were also told at an early date that forced redundancies were ‘on the cards’. Further, there is no dispute that those employees who worked until the closure of the Coalcliff site on 21 June 2013 were properly made redundant and were paid all of their legitimate entitlements.
[78] The dispute before me is a narrow one. The CFMEU argues that while it accepts that there was proper consultation concerning those who volunteered for redundancy, there was no adequate consultation in relation to those who were made forcibly redundant, including Mr Flint and Mr Steinmann. The failures in consultation ascribed to ICC by the CFMEU relate to the alleged failure of the Company to consult with the Union and the relevant employees before making Mr Flint and Mr Steinmann forcibly redundant on a date prior to the closure of the Coalcliff site. The Union also alleges that Mr Flint and Mr Steinmann had received assurances that they would remain employed until Coalcliff closed.
[79] I accept Mr Wright’s evidence that he was referring to those who volunteered for redundancy when he stated to the CFMEU and the workforce that employees would have to work until Coalcliff closed in order to receive their redundancy benefits. His explanation that this was necessary to guarantee an orderly closure appears to me to be credible. At the time, it was not known how many employees would volunteer for redundancy.
[80] I am satisfied and find on the evidence and materials before me that no representations were made to the Union or Mr Flint or Mr Steinmann that constituted any type of undertaking from ICC that they would be employed until Coalcliff closed. Mr Steinmann in particular admitted in cross-examination that all he possessed in that regard was an ‘impression’ (see paragraph 60 above).
[81] Section 389 of the Act and the terms of the Agreement make no distinction between voluntary and forced redundancies and, once the Company’s legitimate requirements were established, it was free to proceed with the redundancies provided it met its legal obligations in relation to payments. This it did.
[82] The Company found itself in a position where it was able to dispense with the services of the applicants on 30 April 2013 and then proceeded to do so. In that regard, I further accept the evidence of Mr Wright that it was agreed with the Union that when a selection for redundancy was assessed, tradesmen would be compared with tradesmen rather than with tradesmen and lower skilled workers. On that basis, the Company reached a reasonable conclusion as to its requirements for electricians and the result was that Mr Flint and Mr Steinmann were surplus to requirements. There was no obligation on ICC to attempt to redeploy the applicants into lower level positions. The use of a contractor or contractors to perform electrical work at Coalcliff does not affect the genuineness of the redundancies. 52
[83] In accordance with s.381(2) of the Act, I am further satisfied that each party has been accorded a ‘fair go all round’.
[84] All in all, I am satisfied that the terminations of employment of Mr Flint and Mr Steinmann were the result of genuine redundancy. There was therefore a valid reason in each case for the termination of employment. The Company’s jurisdictional objection is made out and the substantive applications for relief are dismissed.
COMMISSIONER
Appearances:
T Slevin of counselfor Graham Flint and Andrew Steinmann.
P Ludeke for Illawarra Coke Company Pty Ltd.
Hearing details:
2013.
Sydney:
September 2.
1 See Exhibit CFMEU 1.
2 Exhibit ICC 2 and ICC 3 respectively.
3 Transcript PNs126-127.
4 Transcript PN130 and following.
5 Transcript PN136.
6 Transcript PN137.
7 Transcript PN145.
8 Exhibit ICC 4.
9 Transcript PN183 and following.
10 Exhibit CFMEU 3.
11 See Attachment RT1 to Exhibit CFMEU 3.
12 See Attachment RT2 to Exhibit CFMEU 3.
13 See Attachment RT3 to Exhibit CFMEU 3.
14 Transcript PN239.
15 Transcript PN250.
16 Transcript PNs264-265.
17 Transcript PN272.
18 Transcript PN277.
19 Transcript PNs280-281.
20 Transcript PNs282-284.
21 Transcript PNs285-287.
22 Transcript PNs288 and 292.
23 Transcript PN294.
24 Transcript PN295.
25 Transcript PN303.
26 Transcript PN312.
27 Transcript PNs316-318.
28 Transcript PN320.
29 Transcript PNs324-325.
30 Transcript PN334.
31 Transcript PN342.
32 Transcript PN350.
33 Transcript PNs357-359.
34 Transcript PN369.
35 Exhibit CFMEU 4.
36 Transcript PN400.
37 Transcript PN407.
38 Transcript PNs417-418.
39 Transcript PN433.
40 Transcript PNs440-443.
41 Transcript PN445.
42 Transcript PNs462-467.
43 Transcript PN473.
44 Exhibit CFMEU 5.
45 Transcript PNs547-548.
46 Transcript PNs554-556.
47 Transcript PN557.
48 Exhibits CFMEU 1 and CFMEU 2.
49 Exhibit ICC 1.
50 [2012] FWAFB 5241 per Senior Deputy President Acton, Senior Deputy President K
51 [2011] FWA 4239.
52 See Suridge v Boral Window Systems Pty Ltd T/A Dowell Windows, [2012] FWA 3126 at paras 73-74.
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