Gundi v Sensis Pty Ltd
[2017] FCCA 1438
•27 June 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GUNDI v SENSIS PTY LTD | [2017] FCCA 1438 |
| Catchwords: INDUSTRIAL LAW – Redundancy – alleged breach of Fair WorkAct2009 and Enterprise Agreement – restructure of business – admission on pleading – change of employment responsibilities – whether role rebalanced or substantial change of position – whether employee made redundant – sufficiently substantial changes in employ made position redundant – redeployment – whether employee offered Reasonable alternative position within meaning of enterprise agreement – employee not redeployed – disentitlement or exclusion of entitlement to redundancy – whether employee offered Suitable Position within meaning of enterprise agreement – onus of proof – shifting onus – employee not offered Suitable Position – entitlement to redundancy payments established – motor vehicle allowance paid under policy – whether policy incorporated into or intended to form part of contract – allowance refused – damages – serious breach of contract – repudiation accepted by employee – entitlement to damages established in sum equal to redundancy payments. |
| Legislation: Fair Work Act 2009 (Cth), ss.50, 51, 546, 570 Acts Interpretation Act 1901 (Cth), s.2B |
| Cases cited: Adelaide Milk Supply Co-operative Ltd (1977) 16 SASR 6 Amcor Ltd v CFMEU (2005) 222 CLR 241 Australian Paper Manufacturers Ltd v American International Underwriters (Australia) Pty Ltd (1994) 2 VR 684 Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd (2014) 245 IR 394 Bampton v Viterra Ltd (2015) 123 SASR 80 City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 CDJ v VAJ (1998) 197 CLR 197 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Clothing & Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226 Cohen & Co v Ockerby & Co Ltd (1917) 24 CLR 288 Collector of Customs v Agfa Gevaert Ltd (1996) 186 CLR 389 Commonwealth Bank of Australia v Barker [2013] FCAFC 83 Commonwealth Bank of Australia v Barker (2014) 53 CLR 169 Commonwealth Bank of Australia v Finance Sector Union (2002) 125 FCR 9 Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26 Dibb v Commissioner for Taxation (2004) 136 FCR 388 Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286 Ex parte Adelaide Milk Supply Co-operative Ltd (1977) 16 SASR 6 Factory 5 Pty Ltd (In Liq) v State of Victoria (No.2) [2012] FCAFC 150 Finance Sector Union of Australia v Commonwealth Bank of Australia [2001] FCA 1613 Fosters Group Ltd v Wing (2005) 148 IR 224 Gamboni v Bendigo and Adelaide Bank Ltd (2013) 39 VR 578 Goldman Sachs JB Were Services Pty Ltd Nikolich [2007] FCFCA 120 Hodgson v Amcor Ltd (2012) 264 IR 1 Independent Commission Against Corruption v Cunneen [2015] HCA 14 Jones v Department of Energy and Minerals (1995) 60 IR 304 Kucks v CSR Ltd (1996) 66 IR 182 Malec v J C Hutton Proprietary Limited (1990) 169 CLR 638 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Meehan v Jones (1982) 149 CLR 571 Minister for Immigration & Ethnic Affairs v Guo (1997) 191 CLR 559 Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784 Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 R v Industrial Commission of South Australia Re Clothing Trades Award 1982 (No.1) (1990) 140 IR 123 Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 Short v FW Hercus Pty Ltd (1993) 40 FCR 511 Spotless Services Australia Pty Ltd (2013) FWC 4484 Stratacrete Pty Ltd [2016] FWC 2880 Szanto v ISS Facility Services Pty Ltd [2013] FWC 3270 UGL Rail Services Pty Ltd v Janik (2014) 246 IR 320 Vicstaff Pty Ltd v May (2010) IR 233 Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 Westen v Union des Assurances des Paris (1996) 88 IR 259 Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 Whittaker v Unisys Australia Pty Ltd (2010) 26 668 Zafiriou v Saint-Gobain Administration Pty Ltd [2013] VSC 377 |
| Texts referred to: Lewison, The Interpretation of Contracts, 3rd Ed (2004) |
| Applicant: | ROBERT GUNDI |
| Respondent: | SENSIS PTY LTD |
| File Number: | MLG 1206 of 2016 |
| Judgment of: | Judge A Kelly |
| Hearing dates: | 8 and 9 March 2017 |
| Date of Last Submission: | 9 March 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 27 June 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr Langmead |
| Solicitors for the Applicant: | McDonald Murholme Solicitors |
| Counsel for the Respondent: | Mr Burmeister |
| Solicitors for the Respondent: | Seyfarth Shaw Australia |
THE COURT ORDERS THAT:
There be judgment for the applicant in the sum of $42,132.12.
The question of interest on the said sum of $42,132.12 is reserved.
Within 21 days after this date, the applicant file and serve a submission (not exceeding 6 pages) on the questions of interest and any penalty sought pursuant to s 546 of the Fair Work Act 2009 (Cth).
Within 42 days after this date, the respondent file and serve any submission (not exceeding 6 pages) in relation to the questions of interest and any penalty.
The proceeding is listed for further hearing on Monday, 30 October 2017 at 10.00am.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1206 of 2016
| ROBERT GUNDI |
Applicant
And
| SENSIS PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
Robert Gundi worked for the respondent (Sensis) within its mobile operating model in Geelong. He commenced employment in early 2008, then being employed as Telephone Sales Consultant (T3) – Yellow Pages. From late 2011, Mr Gundi was employed as a Media Sales Advisor. The fundamental focus of Mr Gundi’s role as a Media Sales Advisor in early 2016 entailed responsibility for the management of a portfolio of established customers of Sensis. By contrast, the responsibility of a Telephone Sales Consultant (T3) – Yellow Pages had been to make unsolicited (or ‘cold’) calls in the endeavour to win new custom for Sensis. Mr Gundi’s employ terminated in 2016.
On 5 February 2016, Sensis announced that it was to restructure its business. By this proceeding, Mr Gundi contends that his role as Media Sales Advisor was made redundant. He claims for relief in consequence.
The parties’ employment contract was subject to an agreement called the Sensis Enterprise Agreement 2014 (Sensis Agreement) which relevantly regulated their rights and obligations to pay certain sums upon the position in which Mr Gundi was employed becoming redundant.
Sensis submitted that this claim may be decided upon the discrete question whether Mr Gundi’s position with Sensis was made redundant. At trial, Mr Gundi agreed in that view of the matter. In summary, I conclude that Mr Gundi’s position was made redundant and that he was not redeployed to a Reasonable alternative position or offered a Suitable Position within the meaning of the Sensis Agreement. I uphold the claim for redundancy payments. I dismiss the claim for a motor vehicle allowance. Issues of penalty are stood over. My reasons follow.
Background and procedural history
Although I acceded to the parties’ submissions that the question of redundancy was dispositive of the matter, it is of some utility to see how the claim evolved. Mr Gundi based his claim upon two employment contracts, the first being made in early 2008 and the second in 2011.
Mr Gundi was employed as a Media Sales Advisor pursuant to the second contract. He alleges that the primary duty in the position of Media Sales Advisor was to manage existing client relationships. A significant part of Mr Gundi’s remuneration was derived from the commission earned upon having achieved monthly sales targets. Mr Gundi regularly achieved those targets, being the highest performing advisor in the Geelong region in 2015 (i.e. in the period immediately before his termination). Mr Gundi attached particular weight upon his having established strong relationships with existing customers. He did so because existing customers were likely to maintain their custom and so he could be reasonably sure that his entitlement to commission would follow. By contrast, the prospect of winning sufficient orders from new customers was a less certain prospect.
Mr Gundi claims that his role was made redundant in consequence of the restructure effected by Sensis in early 2016. On Mr Gundi’s case, following the restructure he was only to work on winning new business. He was required and in effect, directed, to only cold call prospective customers with a view to winning their custom. He no longer had responsibility for his existing clients and his portfolio of existing clients was transferred elsewhere and distributed to others. Consequently, Mr Gundi lost the ability to earn commission from that customer base.
On 8 June 2016, Mr Gundi filed an application claiming relief under the Fair Work Act 2009 (Cth). Mr Gundi claims relief including for compensation, penalties, damages, interest and costs.
In its Response, Sensis opposed all relief claimed by Mr Gundi.
On 1 September 2016, the matter was fixed for trial. Consent orders were made regulating the interlocutory steps to be taken in preparation for trial including that the trial be upon affidavit and providing for the filing and service of outlines of argument.
The pleadings comprised a statement of claim, defence and reply. The pleadings were of assistance in marking out the territory of their dispute. It is convenient to identify the issues raised upon those pleadings and those addressed in the parties’ opening outlines insofar as they identify matters additional to the pleaded allegations. To the extent the parties’ opening outlines are not referred to below, this merely reflects the circumstance that the pleadings and outlines traversed the same issues. On the position taken at trial, most issues of fact were uncontroversial.
Employment contracts
As to the first employment contract, Mr Gundi relied upon a written contract, pleading that he no longer had possession of the relevant document. Sensis pleaded, and by his Reply, Mr Gundi admitted, that Mr Gundi was first employed pursuant to a letter of offer dated 31 January 2008, signed by Mr Gundi which provided for him to commence employ on 25 February 2008 in that role designated as Telephone Sales Consultant (T3) – Yellow Pages.
Mr Gundi’s outline contended that his primary duty in the role of Telephone Sales Consultant was to cold call prospective customers and to locate new business opportunities. Sensis did not dispute this.
Sensis pleaded two express terms and three implied terms of the first contract. By his Reply, Mr Gundi called for production of the letter of offer dated 31 January 2008, did not admit the express terms and denied the implied terms as alleged by Sensis.
Sensis pleaded as express terms of the first contract that:
(a)Sensis could reassign Mr Gundi at any time to any role within its business for which Mr Gundi was suitably qualified, whether on a temporary or permanent basis, with different duties, location or reporting relationships;
(b)if Mr Gundi was so reassigned or seconded, his employment would otherwise continue on the terms of the parties’ agreement.
As pleaded, there was no reference in the first express term to a right in Sensis that Mr Gundi could be seconded to other employment. By contrast, the second express term was cast in terms that addressed both reassignment and secondment. If there was a distinction between those terms it was not explored at trial.
Sensis pleaded implied terms of the first contract that Mr Gundi would:
(a)exercise reasonable care in performing his duties;
(b)perform his duties in a proper and efficient manner;
(c)be ready, willing and able to perform his duties, other than at times when he was absent on authorised leave.
As to the second employment contract, Mr Gundi relied upon a written agreement contained in a letter dated 6 October 2011. Sensis pleaded, and by his Reply, Mr Gundi admitted, that Mr Gundi was employed pursuant to a letter of offer dated 6 October 2011 and signed by Mr Gundi, which provided for him to commence employ on 24 October 2011, in a seconded position designated as Media Sales Advisor. Sensis’ defence pleaded that it would rely upon the second contract pursuant to which Mr Gundi was seconded to the position of Media Sales Advisor for its full force, meaning and effect. I treated that plea as meaning that the second contract would operate according to its terms.
Mr Gundi’s case is that, as Media Sales Advisor, the primary duty of his role was to manage an established portfolio of existing clients. Sensis’ outline contended that Mr Gundi’s role as Media Sales Advisor had always involved selling to both existing and new customers. Sensis contended that Mr Gundi moved to the position of Media Sales Advisor in its sales division in late 2011 and that he did so pursuant to the written contract dated 24 October 2011.
Again, Sensis pleaded express terms and implied terms of that contract. By his Reply, Mr Gundi sought production of the letter dated 6 October 2011, did not admit the express terms and denied the implied terms.
Sensis pleaded as express terms of the second contract that:
(a)Mr Gundi’s secondment would commence on 24 October 2011 and cease on 23 October 2012 but that the duration of such secondment could be altered by Sensis depending upon what were described in its defence as business or performance issues;
(b)Sensis could reassign Mr Gundi at any time to any role within its business for which Mr Gundi was suitably qualified, whether on a temporary or permanent basis, with different duties, location or reporting relationships.
It is apparent that the second express term of the second contract mirrored the first express term of the first contract above. By contrast, Sensis did not allege that the second express term of the first contract was operative in relation to the second contract (namely, that if Mr Gundi was so reassigned or seconded, his employment would otherwise continue on the terms of the first contract). At first sight, it would seem that the terms of the first contract were only of relevance to the nature of Mr Gundi’s initial role and as providing context or background.
Sensis pleaded, as implied terms of the second contract, the same implied terms as were alleged in relation to the first contract.
Mr Gundi’s outline contended that when he was seconded to the position of Media Sales Advisor with effect from 24 October 2011, the initial period of secondment was for a period of one year, after which his role was made permanent but subject to the terms of the second contract. In this role, Mr Gundi says that he had responsibility to manage a portfolio of some 160 – 170 customers.
Sensis contends that the second contract continued to apply until termination of the parties relations in 2016.
Remuneration
Mr Gundi pleaded, and Sensis admitted in part that, pursuant to the second contract, his remuneration comprised an annual base salary of $68,153 together with superannuation, a vehicle allowance and an entitlement to commission pursuant to Sensis’ commission plan. The base salary and superannuation were common ground.
As concerned a motor vehicle allowance, Sensis pleaded that any motor vehicle or motor vehicle allowance provided to Mr Gundi was so provided by Sensis in accordance with the terms of its motor vehicle policy as amended or replaced from time to time. Sensis further contended, and Mr Gundi denied, that such policy did not form part of the parties’ contract.
As to commission, Sensis pleaded that Mr Gundi was eligible to receive what it described as ‘sales incentive earnings’ in line with Sensis’ commission guidelines and schedules, as amended or replaced from time to time. Again Sensis contended, and Mr Gundi denied, that such guidelines and schedules did not form part of the parties’ contract.
Mr Gundi’s outline repeated the matters related to his remuneration but added that the commission was approximately 2% on new accounts that he acquired. He stated that he regularly received such commissions.
Mr Gundi’s outline also described that, from 15 February 2015, Sensis had implemented a new regime – described by him as a new commission structure – under which he could earn $2,500 per month upon achieving 80% of his monthly sales target. Again, Mr Gundi contended that he regularly achieved that target and, by extension, qualified for the stipulated commission under the new structure.
Mr Gundi identified his remuneration as at January 2016 comprised, as to an annual base salary of $73,029, superannuation calculated at the rate of 9.5% of base salary, a vehicle allowance of $17,420 and an entitlement to commission pursuant to Sensis’ commission plan. As to these matters, Sensis admitted the quantum of the base salary, the rate at which superannuation was to be calculated and, as concerned a motor vehicle allowance, agreed that Mr Gundi was provided an allowance of $17,420 but pursuant, and subject, to its motor vehicle policy. As to the claim for commission, Sensis merely repeated that Mr Gundi would be eligible to receive sales incentive earnings in line with the commission guidelines and schedules, as amended or replaced from time to time.
2014 Sensis Agreement
Mr Gundi alleged and Sensis admitted that the second employment contract was subject to the Sensis Agreement with effect from 15 January 2015. Sensis pleaded that this agreement provided coverage for Mr Gundi’s employment in accordance with the Fair Work Act 2009 (Cth) (Fair Work Act).
It is common ground that the Sensis Agreement was the source of any entitlement to payments in the event of redundancy. Sensis agreed that this agreement applied to Mr Gundi’s employ. For present purposes it is sufficient to note that sub-cl. 17.2 of the Sensis Agreement provided for an entitlement to payment upon redundancy in certain events.
2016 – Restructure
The genesis of the subject claim was then pleaded as arising from an announcement, on 5 February 2016, whereby Sensis was to restructure with the result that the role of Media Sales Advisor would be replaced by not one, but three new roles described as Account Management Retention, Account Management Growth and Business Development Consultant for which employees might provide an expression of interest.
Sensis did not plead to these matters, contending that they contained no allegation of material fact or law. Contrary to Sensis’ plea, I do regard those allegations as being immaterial. Mr Gundi grounded his claim on an allegation that it was by reason of Sensis’ announcement on 5 February 2016 that it would restructure its business that his position as Media Sales Advisor was made redundant. I regard the allegation as being material and relevant as explaining the genesis of and providing the context in which the claim to redundancy entitlements arose.
Mr Gundi’s outline contended that the restructuring announcement was made by Mr Fausto Sinni, National Manager Metro Sales. He contends that the announcement was made on 5 February 2016 and was to the effect that Sensis would be undergoing a restructure in telephone sales and face-to-face sales with the result that three new positions would be allocated to each new sales team in lieu of the role performed by the Media Sales Advisor. The three new roles announced were Account Management Retention, Account Management Growth and Business Development Consultant.
Sensis’ decision to not plead to those allegations may be treated as an admission that Sensis did in fact make an announcement, on 5 February 2016, that Sensis was to restructure its business with the result that the role of Media Sales Advisor would be replaced by not one but three new roles variously described as Account Management Retention, Account Management Growth and Business Development Consultant and for which employees might provide an expression of interest.
Direction to accept new role
Mr Gundi alleges that on 15 February 2016, he was directed to accept the role of Business Development Consultant, the primary duty of which entailed that he “achieve new business.” He says that this direction was given to him during a discussion held on that date with Sensis’ Account Directors, Messrs Damian Salter and Gareth Wright.
Sensis’ defence accepted that a meeting was held on 15 February 2016 attended by Mr Gundi, together with Messrs Salter and Wright. Sensis contended that during the meeting, Sensis’ representatives stated that Mr Gundi would remain in the role of Media Sales Advisor but with a focus on new business acquisition. Sensis further contended that Mr Gundi was suitably qualified to perform duties relating to new business acquisition and that the change in duties was in accordance with the parties’ contract. It further contended that Mr Gundi’s employment continued in accordance with that contract and did so despite the change in duties. Sensis otherwise denied these allegations. By his Reply, Mr Gundi put in issue the matters raised by Sensis’ defence, save as to the fact of the meeting and the persons in attendance.
Mr Gundi’s outline described the meeting on 15 February 2016 at which he was directed to accept the role of Business Development Consultant. His outline contended that during this meeting Mr Salter advised him he had determined that Mr Gundi would be best suited to the Business Development Role. Mr Gundi says he responded that he considered the role would be unsuitable on the stated basis that it would constitute a demotion from his current role. The foundation for the contention that employment in the new role would constitute a demotion was twofold: (a) the new role was considered by Mr Gundi to being akin to the ‘cold-call’ role that he had occupied when he commenced employ in 2008; (b) his ability to earn commissions would be compromised accordingly.
Mr Gundi’s outline stated that the primary duty of a Business Development Consultant entailed that he should locate new business and conduct ‘cold calls’ to win new business from those prospects.
Absence from work
Shortly afterwards, on 24 February 2016, Mr Gundi commenced a period of absence from his employ due to illness for which he says he provided Sensis with medical certificates. Sensis’ defence pleaded that Mr Gundi was absent from work for the period 24 February to 15 April 2016 and that he submitted medical certificates stating that he had a medical condition such that he was unfit for work. Sensis pleaded that Mr Gundi took paid personal/carer’s leave (sick leave).
Sensis further pleaded that in about April 2016, during this period of absence from work; Mr Gundi had spoken to a Sensis customer for whose account he was responsible, in relation to an error with an advertisement with Sensis that related to that customer’s business. Sensis pleaded that Mr Gundi had told that customer he would refer the matter to another staff member but that he had not done so and that his failure to so refer the matter constituted a breach of the terms of the first, and alternatively, the second contract (because of a failure to exercise reasonable care in the performance of his duties or to perform his duties in a proper and efficient manner).
Redundancy
Mr Gundi alleges that on 2 March 2016, he advised Sensis that he considered his role as Media Sales Advisor was redundant and that the role of Business Development Consultant that he had been directed to accept was not a suitable alternative role to that which he occupied. He relied upon a letter dated 2 March 2016 sent by his lawyers to Sensis.
Sensis agreed to having received the letter dated 2 March 2016 but denied that Mr Gundi’s position was made redundant. Sensis further denied that the role of Business Development Consultant was not a suitable alternative role to that of Media Sales Advisor.
By letter dated 16 March 2016, Sensis denied Mr Gundi’s contention of redundancy. Sensis’ defence went further, contending that that letter required Mr Gundi to continue to perform his sales role at Sensis. In its outline, Sensis contended that Mr Gundi’s original role had always involved selling to both existing and new customers and that, from February 2016, the focus merely shifted towards new customers.
Mr Gundi contends that the new role of Business Development Consultant was unsuitable because of the nature of the changes in duties and the detrimental effect on remuneration; namely, the effect which employment in the new role would have on his earnings by way of commission from an existing customer base.
Repudiation and termination
Further, in a letter dated 18 April 2016, Mr Gundi, by his lawyers, contended that Sensis, in giving the direction on 15 February 2016 to accept the role of Business Development Consultant, had thereby repudiated Mr Gundi’s second employment contract, which repudiation he had accepted. Mr Gundi alleged that as a consequence of his acceptance of that repudiation, his second employment contract was terminated. Sensis denied each of these allegations save as to the sending of the letter dated 18 April 2016 and further contended that:
(a)in sending the letter dated 18 April 2016, Mr Gundi had indicated that he was not ready, willing and able to perform his duties; and
(b)for the period from 18 to 21 April 2016, Mr Gundi’s absence from work was not authorised leave and that no medical certificates were given for this period.
Sensis also alleged repudiation of the parties’ contract by Mr Gundi, relying for this purpose on Mr Gundi’s alleged breach of the implied terms of his employment in failing to pass on a customer query in April 2016, in indicating that he was not ready, willing or able to perform his duties and by reason of his unauthorised absence from work in the four day period, 18 to 21 April 2016. Sensis pleaded that it had accepted that repudiatory conduct by letter dated 21 April 2016. Mr Gundi denied any repudiatory conduct on his part. Sensis’ outline contended that the employment (which I took to mean also the parties’ second contract) ended in the context of their dispute over redundancy.
Redundancy entitlement
Upon those facts and circumstances Mr Gundi claimed an entitlement to redundancy payments. The source of the entitlement to redundancy pay lay in cl. 17.2.1(c) of the Sensis Agreement. Mr Gundi’s claim pleaded and Sensis admitted the defined expressions “Reasonable alternative position” and “Suitable Position” in cl. 1.2 of the Sensis Agreement.
Mr Gundi alleged that, within the meaning of cl. 1.2 of the Sensis Agreement, the role that he had been directed to accept; namely, Business Development Consultant was neither a Reasonable alternative position nor a Suitable Position to that of his existing role as Media Sales Advisor. He relied upon two contentions:
(a)first, that the role of Business Development Consultant had a different primary duty and a duty which was less favourable than that of Media Sales Advisor;
(b)secondly, that the difference in such primary duty would result in Mr Gundi receiving less remuneration.
Sensis denied redundancy, relied upon the matters discussed at the meeting held on 15 February 2016 and so contended that neither cl. 17.2.1(b) nor 17.2.1(c) applied in those circumstances. By an alternative plea, Sensis contended that within the meaning of the Sensis Agreement, the Media Sales Advisor – Business Development role was:
(a)a ‘Reasonable alternative position’;
(b)alternatively, a ‘Suitable Position’;
and otherwise denied these allegations.
Mr Gundi alleged, and Sensis denied, that by operation of cl. 17.2.1(a) of the Sensis Agreement and by reason of Sensis’ announcement on 5 February 2016 that it would restructure its business, his position as Media Sales Advisor was redundant.
Mr Gundi pleaded that the termination of the second employment contract consequent upon Mr Gundi’s acceptance of Sensis’ repudiatory conduct was “by reason of the Redundancy” and had occurred in circumstances where: (a) there was no Suitable Position, and: (b) he was offered no Reasonable alternative position. Upon the combined effect of those matters, Mr Gundi claimed entitlements pursuant cl. 17.2.1(c) of the Sensis Agreement which he defined as “Redundancy Pay”.
In denying these allegations, Sensis relied upon: (a) the matters alleged to constitute repudiatory conduct on the part of Mr Gundi and its acceptance of that repudiation; (b) its contentions that neither cl 17.2.1(b) nor 17.2.1(c) of the Sensis Agreement were engaged, and; (c) alternative pleas that, within the meaning of the Sensis Agreement, the Business Development role was either: (i) a Reasonable alternative position; or (ii) a Suitable Position, to that of Media Sales Advisor.
Redundancy pay
Mr Gundi alleged that Sensis had not paid him that Redundancy Pay and that such non-payment constituted a breach of cl. 17.2.1(c) of the Sensis Agreement and of s 50 of the Act by reason of which he had suffered loss in a sum equal to the amount of the Redundancy Pay.
He alleged that $42,132.12 was the amount of that Redundancy Pay.
Sensis, while admitting to having not made any such payment, denied any entitlement in Mr Gundi, or any liability in Sensis, to such payment. Contravention of s 50 was likewise denied.
Mr Gundi’s outline stated that the letter dated 2 March 2016 sent by his lawyers to Sensis contained a demand for payment of his redundancy entitlements.
Vehicle allowance
Mr Gundi also claimed for a breach of the terms of the second contract constituted by the failure, refusal or neglect of Sensis to pay him a vehicle allowance for the period from 22 March 2016 to 18 April 2016.
Sensis at one and the same time relied upon provisions of its Motor Vehicle Policy but contended that it formed no part of the parties’ employment contract. It pleaded that its policy provided that such allowance was paid so as to enable workplace participants to carry out the core responsibilities of their respective roles and that if a participant was absent, whether on paid or unpaid personal leave for a period of 20 consecutive days or more, Sensis would cease paying the allowance.
Relying upon the terms of that policy, Sensis pleaded that Mr Gundi had been absent on leave from 22 March 2016 and at all material days thereafter such that he was not carrying out his core responsibilities and, being absent on personal leave for a period of 20 consecutive days, Sensis had not paid such allowance to him from the twenty first day after he had been absent to the date of termination, 18 April 2016.
Mr Gundi alleged that $1,273 was the amount of that vehicle allowance for the period 22 March 2016 to 18 April 2016. Mr Gundi calculated on the basis of an entitlement being $17,420 / 52 weeks per annum / 5 days per week x 19 days. It is agreed that this allowance was not paid.
Sensis’ denial of this claim is to be seen in the context of it otherwise being common ground that Mr Gundi was absent from work for the subject period and that the allowance was then $17,420. Only the entitlement itself was in issue.
Mr Gundi also grounded the claim for non-payment of the vehicle allowance as constituting a breach of the Act. Sensis pleaded that this allegation was embarrassing and ought to be struck out. Otherwise it relied upon the matters pleaded in response to the motor vehicle claim.
The evidence
Mr Gundi relied upon an affidavit sworn on 4 October 2016 together with an affidavit in reply sworn on 21 November 2016. Affidavits were made on behalf of Sensis by Messrs Wright, Salter and Harwood sworn on 2, 7 and 8 November 2016 respectively. Viva voce evidence was given by each witness. The parties were generally agreed that, for the most part, the key facts were uncontroversial.
Commencement of employ: 2008
Mr Gundi deposed to the circumstances of his employ. He swore that he commenced employment in 2008 in a position he described as Telephone Sales Acquisitions and that he did so pursuant to a written contract. He described the requirements of the position of conducting outbound phone calls and spotting for new business nation-wide.
Although Mr Salter did not commence employ with Sensis until May 2013, he gave evidence that in 2008 Mr Gundi commenced his employ in the role of Telephone Sales Consultant (T3) – Yellow Pages. Mr Salter produced Mr Gundi’s original employment contract dated 31 January 2008. Mr Salter’s evidence was that the Telephone Sales team was focussed on new business acquisition (as distinct from a responsibility for existing customers).
Appointment as media sales advisor: 2011
On 24 October 2011, Mr Gundi was seconded to the position of Media Sales Advisor, working within the Geelong Sales Team. This role was undertaken pursuant to a written contract. Mr Gundi’s role became permanent with effect from August 2012. When Mr Gundi’s role became permanent, no new written contract was executed by the parties.
Mr Salter also gave evidence, without objection, that with effect from October 2011, Mr Gundi commenced employ in the role of Media Sales Advisor, and that his secondment to that role was for an initial period of twelve months.
He produced Mr Gundi’s employment contract dated 24 October 2011. While the pleaded claim and defence do not raise matters in which terms of the parties’ contract assume particular significance. I note the following:
(a)Re-assignment: “The Company may re-assign you at any time to any role for which you are suitably qualified . . . Your employment in the event of any re-assignment or secondment will otherwise continue on (sic, the) terms of this agreement.” (cl. 5)
(b)Remuneration package: “. . . you will also be eligible to receive sales incentive earning in line with the commission payment guidelines and schedule. . .” (cl. 6)
(c)Motor vehicle: “In addition to your base remuneration, to assist you in performing your role a fully maintained company vehicle will be provided to you on location after successful completion of the initial training. . . . You are required at all times to comply with the current Motor Vehicle Policy, a copy of which is attached. The Motor Vehicle Policy does not form part of your contract of employment or create enforceable rights in your favour. . . .” (cl. 7) (emphasis added)
The contract also provided for personal and compassionate leave (cl. 11) and addressed certain Sensis policies (cls. 21-23). Clause 26 of the contract contained an entire agreement clause.
Reporting
From November 2014, Mr Gundi commenced reporting to Mr Damien Salter – Account Director. From this time, Mr Gundi underwent annual performance reviews which, he said, “were always highly positive.”
Mr Salter gave evidence that had worked for Sensis since 2013. In the preceding period, May 2013 to November 2014, Mr Salter had worked as a Media Sales Advisor with responsibility for servicing a portfolio of small to medium sized businesses located in Tasmania.
Since February 2016, Mr Salter occupied the role of Account Director F2F Melbourne at 222 Lonsdale Street, Melbourne reporting to Mr Gareth Wright. Mr Salter swore that his current responsibilities included leading a team of Face to Face Media Sales Advisors who serviced the region of metropolitan Melbourne. He described his responsibilities as being to lead his team to meet, and exceed, sales, gross revenue targets, customer satisfaction results and activity based key performance indicators. He described his duties as including one-on-one sales coaching and skills development with his team members.
Mr Salter swore that in the period November 2014 until February 2016 his responsibilities as Account Director had included Sensis’ business in the Geelong and Mornington regions. He clarified in evidence that neither he, nor the Media Sales Advisors, had a physical workplace in Geelong. Rather Sensis used what was described as a mobile operating model. Mr Salter worked primarily from his home. He said that Media Sales Advisors spent the majority of their time out on the road visiting customers.
Mr Gundi was one of eight Media Sales Advisors who reported to Mr Salter in that period. Mr Salter gave evidence that Mr Gundi’s day to day activities typically included attending meetings with existing and prospective customers, reviewing existing advertising programs, proposing and implementing new advertising programs and completing administrative tasks, which he described.
Mr Salter said that Mr Gundi was responsible for ‘growing’ a portfolio of existing Sensis customers and for acquiring new business. He swore that at the commencement of each sales campaign, Mr Gundi was allocated a portfolio of clients by Sensis and directed to retain and grow the business of those existing customers. He also gave evidence that another component of Mr Gundi’s role was to win new business, describing that that was to be done “using digital and other means” such as “by conducting internet searches and using social media and local observation to identify prospective customers.” Thereafter it was up to the Media Sales Advisor to pursue the lead.
Mr Salter gave evidence that in his role as Account Director he had discussions with his eight person team about winning new business and that he sent them coaching tips on this topic. He produced in evidence a total of three emails spanning the period November 2014 to September 2015 which illustrated what he had done. These emails provide some insight as to what Sensis expected, and tried to achieve, in the way of winning new business:
(a)by his email dated November 24, 2014 (being the month in which he commenced in the role), Mr Salter wrote to his team:
As we move into the last 4 working weeks of the calendar year, the company has identified a need to focus on our new business to ensure we all have a great run home.
I understand that everyone is busy with BOTS customers but as you’re all aware, new business is all about activity. Can we all please have 5 new business spots logged by Friday COB . . . with the goal of at least one appointment booked. I think this is a pretty reasonable expectation, just 1 per day . . .
It is apparent that as Sensis’ Account Director, Mr Salter considered an achievement of one new appointment per day to be a pretty reasonable expectation for his Media Sales Advisors to aim for in that period. His email did not disclose what amount of new business he or Sensis reasonably expected to win from the new appointments so made. Mr Gundi’s evidence was that the Geelong team had difficulty with achieving this expectation because the workload of meeting the needs of existing ‘BOTS’ customers was itself very heavy. He was not challenged on this. In cross-examination Mr Salter said that the task of finding new business could be undertaken by, for example, identifying vehicles (on the roads or in car parks) which did not have Sensis advertising, or by on-line digital searches or by traditional means for business advertising;
(b)in an email sent on May 27, 2015 Mr Salter forwarded an email from a Sensis Operations Manager, Mr Langenberg. By this email Mr Langenberg suggested how staff might perform a trace from a website and follow a link back to potential customers. Mr Salter’s observation was limited to: “Great idea for spotting, see below.” In effect, Mr Salter endorsed the suggestion that he, and all other Sensis Account Directors, had received from Mr Langenberg on how to trace a new business lead;
(c)by his email dated September 30, 2015, Mr Salter wrote to his Geelong team attaching a copy of notes made on a whiteboard during a meeting the previous day. Mr Salter recorded that the Geelong team, as a whole, was expected to target a total of 25 customers which had been identified during that meeting. Mr Salter also noted that he had amended the existing plan for F2F sessions such that, with effect from October 2015, the Geelong team would meet on Tuesday’s from 10.00am until 1.00pm to discuss new business. Pressed as to this email, Mr Gundi disagreed that the meeting was in fact dedicated to discussing new business – he said that the allocation of time was 50/50 in terms of new business and account management of existing customers. Mr Salter was not asked to address Mr Gundi’s description of the amount of time spent in Tuesday meetings addressing new and existing business. Mr Gundi also said that the list of 25 customers comprised some customers who had cancelled contracts with Sensis and others who might be prospects. He explained that the sales representatives on the team (having, on average five years experience), were able to compile the list of 25 customers within a few minutes. I understood his evidence to mean that the challenge was not in identifying the prospective 25 customers, but in obtaining them as customers for Sensis.
Those emails might be seen as providing some indication of the level of new business opportunities to be won from the Geelong region in 2014 – 2015.
Mr Salter gave evidence concerning his ability to observe Mr Gundi in his work stating that as “Mr Gundi’s one-up manager; I had visibility of his day to day activities. Media Sales Advisors are required to log their activity. At that time, activity was logged in an application called ‘Front Row Sales’. I received a daily report with each team member’s activity for the previous day. Media Sales Advisors are also required to record any customer appointments in their Outlook calendar, which I had access to.” This evidence must be understood in the context of his evidence that there was no Geelong office, that he, Salter, worked from home and that the Media Sales Advisors were mostly out on the road visiting customers.
Mr Salter also stated that he met with Mr Gundi for coaching sessions. By way of example:
(a)on 12 December 2014, he sent Mr Gundi an email which “set goals for the run home” and attached a coaching action plan together with a customer list and forecast. Mr Salter acknowledged that the “obstacles, overcomes & follow up in order to achieve your goals” was listed in that coaching action plan. His email recorded that the actions required of Mr Gundi were to maximise existing BOTS opportunities, aim for $15,000 in new business sales and to re-work cancellations and decreased sales from existing customers. Mr Gundi was pressed that he had agreed “to an action required in that email as well: 15k in new business.” He responded that the email recorded a goal that was set for him by Sensis. He agreed that he had not achieved that goal. Mr Salter suggested in his evidence that the $15,000 goal had been mutually agreed but clarified that he could not recall whether there had been discussion with Mr Gundi in which the language of ‘mutual agreement’ had been used or whether it was a conclusion he had drawn. Mr Salter’s action plan itself recognised that winning new business would be difficult, especially in light of the slow down leading up to Christmas;
(b)on 2 February 2015, Mr Salter sent an email to Mr Gundi with suggestions to assist him in spotting new business. The suggestions took the form of encouragement to ‘spot’ for new business and might fairly be described as being of a general nature. They did not, for example, inform Mr Gundi of a potential new customer in the Geelong region and suggest that Mr Gundi should try to make contact. Mr Gundi agreed that the Sensis sales year ended at the close of February 2016 and that this email related to business objectives in the closing phase of that year. Mr Gundi said that it was of greater importance to close and resolve existing customers which formed part of his workload. It seemed to me to be consistent with the evidence of Mr Salter and Mr Gundi (including the email sent on November 24, 2014), that Sensis would seek to maximise sales in the closing weeks of a sales cycle and that a most effective method of seeking to achieve that goal was by obtaining sales from a portfolio of existing customers.
No other examples of personal coaching were given in respect of the period after February 2015.
Customer lists
Mr Gundi said that as Media Sales Advisor he managed a portfolio of some 160 – 170 clients who were located in the Geelong area. Mr Gundi managed those clients on a face to face basis. He swore that those clients were “worth an approximate total of $1.2 million” and that he was required to meet a yearly dollar return target by the end of the sales cycle in mid-February, which he “consistently met.” In re-examination he explained that a Media Sales Advisor was given a list of customers at the beginning of each sales cycle.
Mr Salter agreed that Mr Gundi did manage a portfolio of some 160 – 170 clients who were located in the Geelong area and that the worth of the business from those customers was ~ $1.2m in the 2015-2106 sales year (being February 2015 to February 2016). Mr Salter pointed out that those customers had not been won by Mr Gundi, that they had been allocated to him by Sensis and that it was a matter for Sensis as to how it “decided to divide the revenue pool.” In re-examination Mr Salter said that Mr Gundi had no right to those customers from one sales cycle to another. He did not suggest that Media Sales Advisors who had been assigned responsibility to deal with existing customers had no right to a portfolio of customers.
Mr Salter challenged Mr Gundi’s evidence that he, Mr Gundi, had consistently met the yearly dollar target set for him by Sensis for its sales year. Mr Salter pointed out that:
(a)during issue 35, or I.35, (sales campaign ending 22 February 2015) – Mr Gundi had fallen short in the year to date sales target of $1,248,440. He stated that Mr Gundi had achieved a result of $1,242,203;
(b)during issue 36 (sales campaign ending 14 February 2016) – Mr Gundi had achieved the annual dollar return target that had been set for him but he had failed to achieve an annualised growth target set in that year;
(c)as he had not carried out more than one annual performance review for Mr Gundi, he also disagreed that his performance reviews were always highly positive. He gave evidence of the results of the performance review which he had conducted, describing it as being “good, but there were areas for improvement” and produced Sensis correspondence with Mr Gundi which suggested that the results of the performance review had been used to determine his remuneration increase – a 1% increase being given on 10 December 2014.
Remuneration
Mr Gundi gave evidence of his remuneration, superannuation, motor vehicle and commission entitlements. He gave evidence that his annual remuneration was increased in January 2016 to $73,029 plus superannuation and a motor vehicle allowance of $17,420.
As to his commission entitlements, Mr Gundi swore that he was “eligible to earn a fortnightly commission of approximately 2% of any account I brought in and managed.” He gave evidence that in February 2015, Sensis implemented a new commission structure which differed from the then existing structure in that “a minimum of 80% of the monthly target had to be met in order to be eligible to earn a monthly commission of $2,500.”
Mr Salter also gave evidence as to the basis on which Sensis employees were paid commission including that “the commission structure is at the discretion of Sensis and is varied from time to time to reflect the focus of the business from one sales campaign to the next.” Mr Salter’s evidence was that in February 2015, Sensis changed how an employee’s sales performance was measured but that this change in the method of measuring sales performance “did not impact the overall commission opportunity available to employees.” As Mr Salter characterised this change, it was only a change to the way in which an employee was incentivised. The substantive change was that, instead of being paid a flat commission per sale, employees became eligible for commission “based on revenue growth” and that the method of calculating commission was as a percentage of the revenue growth target so assigned to an employee. The example provided by Mr Salter was as follows:
For example, if an employee is set a target of $20,000 in a month and their revenue result is $40,000 their percentage to target is 200%.
Mr Salter produced a 2015 Sensis commission policy. The document so produced indicates that the policy was originally established on 17 June 2015 and updated with effect from 30 June 2015 so as to deal with a topic described as bonus payments. Although the policy is described as the Sales Commission Policy 2015, it dealt in express terms with the “2016 sales commission plans” and Appendix B to the policy confirmed that it operated for the period February 2015 to February 2016. While the policy does provide that the payment of commission was to be at the discretion of Sensis in particular circumstances (such as where an employee had been given a warning), other statements in the document indicate that the means of securing payment of commission was highly regulated with the overall expressed object that “measures have been put in place to ensure a consultant does not receive more than the commission amounts that are payable to him or her in accordance with this policy.” Further, the policy provided that Sensis would communicate any changes to the plan prior to implementation and stated further that “Sensis will not reduce the on target ending opportunity as detailed in the employee’s contract of employment.” Beyond this, I could not locate an express term supporting the statement by Mr Salter that Sensis’ “commission structure is at the discretion of Sensis.”
Mr Gundi gave evidence that he achieved the targets necessary to qualify for commission under the new policy 7-8 times in 12 months. He said that while the new policy introduced a target based entitlement which included elements of sales to both existing and new customers, very little of the target related to business from new customers. In cross-examination Mr Salter agreed that, in the I.35 sales cycle (2014-2015), Mr Gundi had achieved sales targets sufficient to be paid commission in most months and that in the I.36 sales cycle (2015-2016), Mr Gundi had been paid bonuses in most months.
Role clarity statement
Mr Salter produced a role clarity statement in evidence. He swore that it was for the role of Media Sales Advisor, Face to Face, and then described the tasks included in that role. The document stated that it related to the Position Title: Media Sales Advisor, Face to Face and applied to the Division: Sales Operations in the Regional North Department. The Position Purpose was as follows:
Position Purpose: To retain and grow a portfolio of clients by utilising a 6 step sales process and all tools available to offer a media solution that delivers to ROI expectations while maximising the customer experience with timely contact, follow-up and after sales service.
The precise meaning of those words was not explored.
Beneath the statement of the Position Purpose, was a table arranged in a landscape format that contained three columns entitled “Key Result Areas – Usually no more than seven (7)”, “Major Tasks” and “Targets and Measures” respectively. Under the heading Key Result Areas, the five rows in that table addressed the following topics:
Market Management 45% weighting
New Business 20% weighting
Customer Experience 20% weighting
Sensis values . . . 10% weighting
OH&S 5% weighting
As concerns the topic, New Business, the second column contained dot points as to the Major Tasks by which a Media Sales Advisor – Face to Face might achieve the Position Purpose of retaining and growing a portfolio of clients by utilising the six step sales process and all of the tools available to offer a media solution that delivers to ROI expectations while, at the same time, maximising the customer experience with timely contact, follow-up and after sales service:
·Actively source, wash and log new business via competitive media and local observation
·Actively seek new business through referrals
·Maintain new business pipeline with active or closed status updated and regular communication with AD
AD was the acronym used to denote an Account Director, being the person to whom a Media Sales Advisor would report.
Taken to that statement, Mr Gundi said he saw it after being appointed as a Media Sales Advisor but, as it was undated, he was unsure when precisely he had seen it. Mr Gundi’s evidence was that over his eight year period of employ, many documents of this kind were provided, not infrequently (if not constantly), by Sensis to its employees. In the case of this role clarity statement, I note that it contained space in which the date (by month and year), the statement had been last reviewed but that the space to enter this date and year entry was left blank.
Mr Gundi agreed the role clarity statement identified as a major task that in the role of Media Sales Advisor that he was required to “actively source, watch [for] and log new business.” Mr Gundi also agreed that the role clarity statement referred to a weighting of 45% for market (or account) management of existing customers and 20% for new business. But he disagreed that the suggested weighting reflected what the fact occurred in the day to day performance of the role of Media Sales Advisor. In re-examination Mr Gundi said that in the role of Media Sales Advisor he would devote about half an hour a week to new business. He explained that only that amount of time was spent on trying to spot new business, having regard to the time required to service the portfolio of existing customers. Mr Salter was taken to this topic and said that he could not give an accurate estimation of whether the Geelong Media Sales Advisors work on new business did or did not constitute 20% of their workload. This answer was curious in light of the fact that Mr Salter was responsible for the supervision of that team and stood in contrast with his evidence that he had so-called ‘visibility’ around Mr Gundi’s work. While Mr Salter initially contested that a Media Sales Advisor would spend about a half hour per week on new business he seemed to accept that that was potentially a fair reflection of the true position, although a higher amount of time might be spent on new business during the latter part of a sales cycle. I accept Mr Gundi gave an accurate account of the position as concerned the time allocated by Media Sales Advisors to account management of their portfolio of existing customers and to spotting for new business, particularly in light of Mr Salter’s evidence that those employees had no office, worked under a mobile operating model and spent the majority of their time out on the road visiting customers.
Mr Salter swore that the position description for the role of Media Sales Advisor as contained in the role clarity statement was superseded in 2015 and that the current position description for the role was contained in another document that, he said, was supplied to Mr Gundi on 16 February 2016. On several occasions, Mr Salter said in evidence that he could not recall when the position description was superseded. In cross-examination he went further and said that he could not ‘locate’ having sent the new position description to Mr Gundi at any time before February 2016. Nor could he locate anything indicating that anyone else at Sensis had given Mr Gundi the new position description before February 2016. He then agreed that that position description may have been developed and created in February 2016. In re-examination Mr Salter said that it would still have been his expectation that, before 2016, the Media Sales Advisor’s role was as described in that document. This evidence supports an inference, and I find that Mr Salter had not provided a copy of the document to Mr Gundi before 16 February 2016. No other witness gave evidence of having done so before that date.
Mr Gundi’s affidavit in reply referred to exhibit DS-4 to Mr Salter’s affidavit being an undated Position Description for the Media Sales Advisor F2F role. Mr Gundi denied having ever seen it before being given a copy of Mr Salter’s affidavit. He specifically denied having seen it during his employment with Sensis and deposed that it was contrary to what was stated in the role clarity statement. Pressed on this issue, Mr Gundi clarified that he could not be sure whether he had received that document before February 2016.
Restructure: February 2016
Mr Gundi swore that on 5 February 2016, an announcement was made by Sensis’ National Manager Metro Sales, Mr Fausto Sinni, that there would be a “restructure in telephone sales and face-to-face sales” as a consequence of which “three new position were to be allocated to each sales team in lieu of the Media Sales Advisors.” Mr Gundi swore that the new positions were to be designated Account Management Retention, Account Management Growth and Business Development Consultant and that Mr Sinni gave an instruction to staff that they should inform their respective Account Directors of the role in which they were interested in being assigned to.
Mr Salter also gave evidence of this announcement and that he, with Mr Gundi and others attended the meeting held on 5 February 2016 at which it was made. He disagreed in the evidence from Mr Gundi as to what had been said by Mr Sinni (who did not give evidence). He could not recall Mr Sinni referring (as Mr Gundi contended), to “new positions” or using the expression “in lieu of Media Sales Advisors.” Although Mr Salter then deposed that “[t]here were no changes in the overall number of net positions within the structure” his affidavit did not expand upon what he meant by that statement and the topic was not explored further in the evidence.
Mr Salter produced a 2016 Sensis commission policy, the document history of which stated that the original policy had been implemented with effect from 17 February 2016 and that it had been revised by Revisions 2.0 to 6.1 inclusive.
Attempts at winning new custom
Mr Salter gave evidence that after Mr Sinni’s announcement on 5 February 2016, Mr Gundi continued to perform the role of Media Sales Advisor, selling the same products with his title, classification, base salary, overall commission opportunity and reporting line remaining unchanged. Mr Salter then said that:
The only difference was that Mr Gundi was directed to focus his sales activities on new business acquisition, whereas previously he was required to manage an allocated portfolio of customers in addition to winning new business.
It later appeared that Mr Gundi’s re-assignment to the responsibilities of spotting for new business alone was not to take effect until the I.37 sales cycle; that is, from 1 March 2016.
Mr Salter deposed that Mr Gundi continued to have the opportunity to sell to existing customers during the 2016 – 2017 sales campaign but that the opportunity to do so depended upon Sensis allocating such opportunity to him. Mr Salter gave an estimate that 20% – 25% of sales made by Media Sales Advisors whose focus was directed to be upon new business acquisition, consisted of sales to existing customers from leads provided by Sensis.
Direction to new role
Mr Gundi confirmed in re-examination that face to face sales representatives had been told that there was to be a restructure and that Account Managers had directed staff to inform them of the direction which an employee felt represented their strongest suit under that restructure. Mr Gundi said that he considered that the re-assignment to the new role would have a severe impact on his potential earnings at Sensis.
Whatever had been proposed as to staff informing their respective Account Directors of the role in which they were interested in being assigned to, this direction was overtaken by events. Mr Gundi said that immediately following Mr Sinni’s announcement; he received a telephone call from Mr Salter who informed Mr Gundi that he would be the best candidate for the role of Business Development Consultant. It would seem that Mr Salter had already decided the role, or responsibilities, to which Mr Gundi was to be assigned (see below).
Mr Gundi said that he replied to Mr Salter that he was not interested in that role. He said to Mr Salter that he was not interested because of the focus of the role on new business which Mr Gundi considered “was not suited to me or my experience in account management” and that “[a]s such I said I was concerned that I would not be as successful in meeting targets or receiving commissions in that role.” Mr Salter, while referring to Mr Gundi’s affidavit on this issue, did not address Mr Gundi’s evidence that Mr Gundi had said to him that he, Gundi, “would not be as successful in meeting targets or receiving commissions in that role.” I accept that Mr Gundi made those statements.
Mr Salter, referring to Mr Gundi’s evidence, said that he could not recall the phone call but agreed that, following Mr Sinni’s announcement, he spoke with Mr Gundi and with every other member of his team. He denied saying to him that he considered Mr Gundi to be the best candidate for the role of Business Development Consultant or that he was to be allocated to that stream. Sensis witnesses uniformly denied that Mr Gundi had been assigned to the role of Business Development Consultant (Acquisition). However, Mr Salter did agree that he told Mr Gundi that he did want him to focus on new business acquisition. He said that he had assigned Mr Gundi to a Media Sales Advisor role and that as such he was required to acquire new business.
Further, Mr Salter agreed that Mr Gundi had said he did not want the new tasks to be assigned to him because he would not be able to earn the same commission. Mr Salter also agreed that the assignment to those new tasks meant that Mr Gundi was not going to have any existing customers or clients to deal with. Mr Salter agreed that the main focus of Mr Gundi’s skills was on existing clients and expanding business from those existing clients. He concluded that “I thought Rob [Gundi] was good.”
In re-examination, Mr Salter said he considered that Mr Gundi’s concern about the loss of commission was not valid as he considered Mr Gundi to be capable of earning commission in the new role. Mr Salter’s explanation was that – freed of the responsibility of attending to an existing portfolio of 200-odd existing customers – Mr Gundi was then capable of (i.e. he had time for) spotting and winning new customers.
Mr Harwood identified that the results of another employee had improved in 2016 compared to 2015, but he was not aware of another employee whose commission had improved. The basis on which that other employee had achieved improved results was not explained.
Mr Salter stated that it was he who had assigned Media Sales Advisor roles in his team to one of the three streams for Issue 37. He described those streams as being Account Managers, Account Managers (Growth) and Business Development Consultants (Acquisition). He said that his decision to assign an employee to a particular role was based upon their experience and capabilities.
Mr Salter swore that the key difference between the three streams was the profile of the customer who the employee was assigned to service. Relevantly, as concerned the role of Business Development Consultants (Acquisition), he explained that an employee assigned to that role was required to service prospective new customers as distinct from existing customers or customers identified as having a higher propensity for growth.
Mr Salter also said that Mr Gundi’s new responsibilities were not solely about new business as some existing customers were allocated on a rotational basis. As to this, I note Mr Harwood’s affidavit referred to an occasion on 22 February 2016 on which Mr Gundi had contacted him by email asking to be allocated a particular customer. Mr Harwood had replied to that email and, in somewhat peremptory terms, declined that request.
Whatever language be employed and whether it be the profile of the customer or the focus of the role, it was clear that: (a) Mr Salter had made the decision as to Mr Gundi’s new responsibilities (or role); (b) that the portfolio of existing customers for whom Mr Gundi had responsibility for account management were to be removed from him; (c) he was to be responsible to spot, or cold call for new custom.
Meeting 15 February 2016
On 15 February 2016, Mr Gundi attended a meeting with Mr Salter and another Sensis Account Director, Mr Gareth Wright. Mr Gundi’s evidence was that at this meeting, Mr Salter told him that Sensis had determined that it was in the best interests of Sensis’ business that he, Gundi, should take on the role of Business Development Consultant and that Mr Salter then said that Mr Gundi’s “duties would essentially remain the same, however with a shift in focus to new business.” Mr Gundi’s evidence was that he complained to Mr Salter in relation to this determination, on the stated basis that “this position would constitute a demotion given that I occupied a business development role which I first commenced, that I had not applied for the role, that I would suffer financial loss due to less commissions and that for these reasons the role was unsuitable.” Mr Gundi stated that he would be seeking legal advice.
Mr Salter agreed that he, with Mr Wright, had met with Mr Gundi on this date. Mr Salter’s evidence was that he told Mr Gundi he wanted him to focus on new business acquisition. He agreed that Mr Gundi said he had not applied for that role. He said that he told Mr Gundi his role had not changed and “that he continued to perform the role of Media Sales Advisor with a focus on new business.” He said that the conversation went round in circles for thirty minutes before ending when Mr Gundi said he would be seeking legal advice. Despite that being the last topic of discussion at the meeting, Mr Salter’s evidence was that he could not recall Mr Gundi saying he considered the role as being a demotion or that he would suffer financial loss in the new role.
Mr Wright said that he worked for Sensis based in Hobart. He said that before their meeting he had not had any direct dealings with Mr Gundi. He agreed that Mr Gundi had primarily been engaged in dealing with a portfolio of existing customers and that Mr Gundi made plain he did not want to accept the proposal being made to him by Sensis that he should be assigned to spotting for new business. He agreed that, many years earlier, Mr Gundi had been in a role that was confined to acquiring new business.
The following day, 16 February 2016, at 12.33pm, Mr Gundi sent Mr Salter an email seeking clarification of the role of Business Development Consultant and how his position responsibilities would change. He stated:
Yesterday, I was advised that my role was not changing but the focus of my role was changing, would you please advise in writing – how the focus is going to change and what I will need to be doing differently in the future.
I want to fully understand these proposed changes before I move forward and agree to them.
Mr Gundi agreed that he had sent this email to gain clarity about his new role.
Mr Salter replied to that email at 2.15pm, relevantly, as follows:
Thanks for your e-mail. I appreciate your time yesterday . . . I also understand you feel you need some additional clarification – I’ll attempt to provide that for you along with as much support as I can offer.
Please see attached the MSA Position Description – this outlines the key responsibilities and performance indicators for a Media Sales Advisor.
There is no change to your core role. The F2F MSA roles have always required you to acquire a level of new customers . . . Whether you are in the Business Development Role or the Account Manager role the key focus in our customer base and their portfolios. Whether the customer is new, existing or a returning customer the key function is to communicate and sell our marketing solutions.
The MSA’s (BDC) core focus will be on acquisition of new customers and developing existing customers through a combination of creating and selling to new business opportunities and maximising existing customer opportunities. This will require spotting and cold calling, just as the MSA role has previously. It will also require you to work autonomously and in conjunction with other sales & service teams members to maximise existing customer opportunities, just as the MSA role had previously. As discussed, you will no longer be allocated a list of customers at the beginning of a sales cycle that you’ll be required to service, allowing ample time and opportunity to spot new business and grow other leads,
I hope the above and attached provides the clarification you seek. If you have any further questions please don’t hesitate to ask.
Should you require it; Sensis provides the Employees Assistance Program . . . this is free, confidential and independent . . .
(emphasis added)
Mr Gundi agreed that Mr Salter’s email of 16 February 2016 was the email which informed him of the nature of his new role. Insofar as the email contended that there would be no change in his role, Mr Gundi disagreed that this reflected the reality of the matter. Mr Gundi agreed that his work as a Media Sales Advisor had always included an amount of new business, but he said he was in no doubt about what it was that the new role entailed. He was not pressed further. In re-examination, Mr Gundi said that he considered the removal of his existing portfolio of 160 customers as a completely different state of affairs. He said that “[c]alling existing customers and organising appointments with them to discuss their current and future advertising needs is a completely different role than having to spot, or decipher 150, 200 different business that do not spend – and from the 200 you’re probably only going to get about, you know, 10 or 15 meetings. From the 15 – if I was to call the 150 that I have on my file, I’m going to get 150 appointments so they can discuss what their current and future advertising needs are.” Although I permitted further cross-examination on that issue, the topic was not pursued.
Mr Salter clarified that at the time of the 16 February 2016 email Mr Gundi had responsibility for a portfolio of about 200 existing customers. He said that when the reallocation of tasks took effect pursuant to that email, those 200 existing customers were allocated to other employees comprised of other Media Sales Advisors and staff in the Sensis Telephone Sales Service Team.
At the least, Mr Salter’s 16 February 2016 email supports an inference that during the discussion held with Mr Gundi on 15 February 2016, Mr Gundi was told that he would no longer be allocated a list of customers at the beginning of the 2017 sales cycle whom he would be required to service (and from which service he might derive an entitlement to commission). In my view, the email also supports an inference that Mr Salter had indeed assigned Mr Gundi to the role of MSA (BDC) – that is, Media Sales Advisor (Business Development Consultant) – with a core focus on new customers.
Mr Salter said that the MSA Position Description was attached to this email. The header of the email itself refers to an attachment: F2F MSA PD: PDF. The Position Description for the role title Media Sales Advisor F2F addressed a range of matters but included the following:
Specific Role Purpose
This role is required to maintain and grow customer portfolios. The role could involve:
1. Acquiring as many new business opportunities as possible and/or
2. Maintaining and growing an existing portfolio of SME customers using solution selling techniques.
You may be required to do either of these functions or a combination of both at any point during the sales cycle to meet the sales operating model process and overall business objections
Specific Accountabilities
Specifically, this involves
·Acquire and develop new business opportunities . . .
· . . . (emphasis added)
The text of this Position Description is cast in ambulatory terms. The specific role purpose of a particular Media Sales Advisor could involve either or both of acquiring new business and/or maintaining existing portfolio of customers.
As noted above, Mr Gundi denied having ever seen the Position Description for the Media Sales Advisor F2F being exhibit DS-4 to Mr Salter’s affidavit, before being given a copy of Mr Salter’s affidavit. He specifically denied having seen it during his employment with Sensis and deposed that it was contrary to what was stated in the Role Clarity Statement. Taken to the header of the email Mr Gundi candidly acknowledged that it referred to a F2F MSA PDF but said that he could not recall if he had or had not received the attachment. I find that that document was attached to that email. However, I do not find that it was provided to him before 16 February 2016.
To the extent that the MSA Position Description as attached to the email above indicated that the specific purpose of his role could involve one or both of acquiring new business and/or maintaining and growing an existing portfolio of existing customers, I consider that the generic Sensis Position Description should be read subject to the email addressed personally to Mr Gundi and the more specific information provided in that email. That is to say, I conclude that the email, read with the Product Description confirmed that Mr Salter had assigned Mr Gundi to the role of Media Sales Advisor (Business Development Consultant), with a core focus on new customers and that that he would no longer be allocated a list of customers at the beginning of the 2017 sales cycle. This finding is also supported by the evidence of that which Mr Salter told Mr Gundi would be his new responsibilities in the I.37 sales cycle.
Later on 16 February 2016, Mr Salter sent Mr Gundi a copy of his second employment contract.
Experience in the role
Mr Gundi gave evidence that he did attempt to perform the role of Business Development Consultant and that he did so as he felt he had no other choice. He swore that in this new role he spotted for new business and conducted cold-calls as he had done when first working for Sensis in 2008. On this evidence it appears that the new responsibilities took effect before the I.36 sales cycle had concluded at the end of February 2016.
Mr Salter also gave evidence as to this topic, contending that the Business Development Consultant role was not a new role. He stated that in this period Mr Gundi did not record any customer appointments or activity. Mr Salter produced in evidence a copy report concerning Mr Gundi’s sales activity in the period 15 to 19 February 2016. He described the document as indicating that Mr Gundi did not have any recorded sale activity during the period in question. If Mr Salter was suggesting the contrary, the document does not, in my opinion, support a conclusion that Mr Gundi did not spot for new business or that he did not conduct cold calls.
On one view, the Sensis report produced by Mr Salter, coupled with Mr Gundi’s evidence, support a conclusion that Mr Gundi achieved no sales from having attempted to spot for new business and from having made cold calls in the period 15 to 19 February 2016.
19 February 2016 meeting
During a team meeting held on 19 February 2016, an announcement was made that Mr Harwood would replace Mr Salter as Account Director. Mr Gundi swore that following this meeting he attended a meeting with Messrs Salter and Harwood during which he, Mr Gundi, complained about the adverse situation in which he found himself in his new role as Business Development Consultant.
Mr Salter agreed that there was such a meeting and agreed that Mr Gundi raised his concerns in relation to his new role during that meeting.
Mr Harwood, who had been employed by Sensis from 2003, gave evidence that he had worked as a Face to Face Manager, a Media Sales Advisor and, currently, as an Account Director F2F, reporting to Mr Wright. Mr Harwood gave evidence that he had attended the meeting on 19 February 2016. Mr Harwood stated that before this meeting occurred he had held discussions with Mr Salter before taking on his new role from Mr Salter. In those discussions, Mr Harwood said that Mr Salter had told him that he, Salter, had held discussions with Mr Gundi in which Gundi had been asked to prioritise new business acquisitions and that Mr Gundi had objected to this. Mr Harwood said that Mr Salter had also told him that he, Salter, with Mr Wright, had met with Mr Gundi on 16 February 2016 and that from his discussion, Mr Harwood was aware that Mr Gundi was not happy about the change in his focus of his role.
Mr Harwood said he first met Mr Gundi at the 19 February 2016 team meeting when it was announced that he would be taking over from Mr Salter.
Mr Harwood’s evidence was that, after this meeting he and Mr Salter met with Mr Gundi for about 10 minutes. He described the discussion as being in the nature of a catch-up and said that Mr Salter led the discussion. Mr Harwood confirmed that Mr Gundi said, in effect, that he did not want, and had not asked for, the reassignment of his responsibilities. Mr Harwood suggested to Mr Gundi that he should see the new assignment as an opportunity.
Mr Harwood said that he convened a team meeting for Monday 22 February 2016, which meeting was attended by Mr Gundi.
Personal leave & termination
On 24 February 2016, Mr Gundi commenced a period of personal leave for which he provided medical certificates. He did not return to work at Sensis after that date. As a result, Mr Gundi did not undertake work for Sensis in the sales year designated I.37 (being the period March 2016 to February 2017).
Mr Harwood confirmed that Mr Gundi provided Sensis with medical certificates which progressively covered the period 24 February to 15 April 2016.
By letter dated 2 March 2016, Mr Gundi’s lawyers wrote to Sensis contending that Mr Gundi’s position as Media Sales Advisor had been made redundant and that the role of Business Development Consultant was not suitable alternative employment.
On 18 April 2016, Mr Gundi’s lawyers wrote to Sensis’s lawyers contending that Sensis had repudiated Mr Gundi’s contract of employment, which repudiation was accepted by their client. By letter dated 21 April 2016, Sensis lawyer’s contested Mr Gundi’s allegation of repudiation and countered that it was Mr Gundi who had repudiated the contract which repudiation had been accepted by Sensis.
Sensis adduced in evidence a series of communications between the parties’ lawyers that were exchanged in the period 16 March to 6 April 2016 which related, amongst other things, to customer requests for cancellation of their contracts. Mr Gundi responded to this evidence, explaining that in his dealings with Mr Salter it was agreed, in substance, that the issue of such customer requests had been an ongoing problem and that these ‘teething issues’ would be resolved in due time. Mr Salter gave no evidence to the contrary. The customer requests for cancellations were relied on supporting pleaded allegations of repudiation that were made, but not pressed, by Sensis at trial.
Consideration
The parties were agreed that the issues of redundancy and motor vehicle allowance were dispositive. As to redundancy, two issues were pressed. First, whether Mr Gundi’s position was made redundant. Secondly, whether, within the meaning of the Sensis Agreement, Mr Gundi had been redeployed to a Reasonable alternative position or been offered a Suitable Position so as to negate an entitlement to payment under cl. 17.1.2 of the Agreement. As to the motor vehicle allowance, the issue was whether the policy under which it was paid was part of the contract.
Redundancy
Was Mr Gundi’s position made redundant?
Redundancy is not a term having a fixed legal meaning: see Zafiriou v Saint-Gobain Administration [2012] VSC 377, [58] (Emerton J). In an industrial context, redundancy of position does not bear a clearly defined and inflexible meaning and is not a legal or industrial term of art: Amcor Ltd v CFMEU (2005) 222 CLR 241, [12], [14] (Gleeson CJ, McHugh J), [50]-[52] (Gummow, Hayne and Heydon JJ). Accordingly, the ordinary meaning of the term is a question of fact: Collector of Customs v Agfa Gevaert Ltd (1996) 186 CLR 389, 395. The precise meaning of the term may depend on the context in which it is used: UGL Rail Services Pty Ltd v Janik (2014) 246 IR 320 at [116].
The primary meanings of redundant include superfluous, not needed, that can be omitted without any loss of significance; (of a person) no longer needed at work and therefore unemployed: The Australian Oxford English Dictionary (2nd Ed’n). The Macquarie Dictionary (Federation Ed’n) provides a definition of denoting or relating to an employee who is or becomes superfluous of the needs of the employer. These definitions may be contrasted with the meaning of redundant as employed in an engineering or computing context where a component, not needed, is to be included in case of the failure in another component. The term as applied to the redundancy of an employee’s position is used in a converse sense to that which applies in an engineering context. In the employment context, the position is redundant when no longer needed whereas in the engineering or computing contexts, the part is required but is retained so as to be available for use on an occasion in which there has been a failure of the primary component.
I accept that where the issue is one arising under the Act, an objective test is to be applied in deciding whether the employer has obtained other acceptable employment for the employee. But this is because that is what the text of para 120(1)(b)(i) requires. Some enterprise agreements may also employ the language of acceptable employment in this context.
The question comes back to the proper construction of the individual clause. In other contexts, the parties’ agreement might reserve to one party a discretion whether to accept particular terms that will become operative after their contract has been made (e.g. satisfactory quantity of goods, terms of finance). Such terms are characterised as operating for the protection of one party: cf Meehan v Jones (1982) 149 CLR 571, 578 (Gibbs CJ), 588-591 (Mason J, Wilson J agreeing); Factory 5 Pty Ltd (In Liq) v State of Victoria (No 2) [2012] FCAFC 150, [62] (Rares and Dodds-Streeton JJ, Foster J agreeing generally); Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26, [65] (Gageler J). As Crown Melbourne illustrates, even where such provisions are agreed, there will often be consideration whether the express terms are subject to an implied obligation to act honestly, or honestly and reasonably, in assessing whether the condition is satisfied: see also Lewison, The Interpretation of Contracts, 3rd Ed (2004) [15.05].
The matters addressed above are important for a number of reasons. First, they underline the need to focus upon the text and context of the particular instrument. Secondly, in contrast with para 120(1)(b)(i) of the Act, there is no reference to the term acceptable in the subject clause. Thirdly, this case concerns the proper construction of the phrase Reasonable alternative position as it appears in cl. 17.2.1. Fourthly, they may support a conclusion that the parties to the Sensis Agreement, made in 2014, were quite deliberate in their use of alternative as opposed to acceptable. Fifthly, para’s 17.2.1 b) – c) of the Sensis Agreement remove debate whether an employee had a choice in deciding, subjectively, whether the alternative position was acceptable.
However, none of those matters mean that Reasonable alternative position is to be construed as though divorced from the adjective reasonable or as if that word did not appear. How does the phrase Reasonable alternative position operate in para’s 17.2.1 b) and c)?
Onus
Sensis submitted that Mr Gundi bore the onus of satisfying the court that Sensis did not offer him a ‘suitable alternative position’ (a composite phrase which I draw from the written submissions). In my opinion, this was not an accurate way of approaching the matter. Nor was it accurate to say that Mr Gundi bore the onus of establishing that he had not been offered (and so could not accept) a Suitable Position. Although that was the way in which Sensis put its opening and closing written submissions, Mr Burmeister’s closing oral address did put it that it was for Sensis to establish that it had made the offer of a Suitable Position.
As a matter of construction, to the extent that para’s 17.2.1 b) – d) employ the defined terms Reasonable alternative position or Suitable Position respectively, I conclude that it was for Sensis, not Mr Gundi, to establish that any such position was available and fell within the definition. Further, I conclude that once Sensis adduced evidence bringing the identified new position within the relevant definition, the onus shifted to Mr Gundi to respond to that case. In Hot Tuna Pty Ltd (1988) 27 IR 226 at 230-231 the Full Bench held that where questions of alternate employ were raised in answer to a redundancy claim, the consideration of matters such as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters may be relevant. The Full Bench expressed no doubt that an onus was cast on the employer in relation to such issues (however, the reasons are complicated by the reference to cl. 51(c) of the subject award at p. 231 of the report when it seems clear that one intended reference was to cl. 51(e): see at pp.227-228). The Full Bench held, in the circumstances (where employees had in fact accepted alternative employment), that:
. . . in the absence of positive evidence going to the unacceptability of that employment, including unacceptable features of it, then the Commission is entitled to hold the employment as an acceptable alternative and relieve the employer of the obligation under cl. 51(c) of the award. (p.231)
The reasoning supports conclusions that the employer bears the primary onus of bringing the proposed alternative employ within the subject provisions of the enterprise agreement and of a shifting onus to the employee to adduce evidence why the alternative employ – including features of it which may have a significant impact on the personal circumstances of the individual – should be held to be unacceptable. An objective evaluation of the issue remains to be undertaken throughout.
If the provisions were characterised as a condition precedent to liability, I would not regard Mr Gundi as being obliged to plead or prove the fulfilment of either of those conditions. It would be for Sensis to plead and prove the non-fulfilment or non-occurrence of the condition.
Another way of considering the structure of the clause may be by analogy to an insuring clause. In such a setting it is settled that the insured bears the onus of bringing the claim within the ambit of the insuring clause (or a proviso) and that it is for the insurer to plead and prove whether the claim is removed from cover by operation of an exception to liability: cfAustralian Paper Manufacturers Ltd v American International Underwriters (Australia) Pty Ltd (1994) 2 VR 684, 690, 694 (Fullagar, Smith and JD Phillips JJ).
For those reasons, I reject the broad submission that Mr Gundi bore the onus throughout of satisfying the court that Sensis did not offer him a suitable alternative position.
The expression Reasonable alternative position is defined as follows:
Reasonable alternative position: A comparable role to the role being performed by the employee before their position was made redundant taking into account remuneration, seniority, skills [sic, and] experience. (see sub-cl. 1.2 of the Sensis Agreement)
The criteria in this definition are limited to four matters: remuneration, seniority, skills and experience. Unsurprisingly, none of those terms are defined in the Dictionary of the Sensis Agreement.
Redeployment
Sensis recognised that the Dictionary to the Sensis Agreement contained separate definitions of the expressions Reasonable alternative position and Suitable Position. Sensis’ submissions sought to blend the concepts of Reasonable alternative position and Suitable Position on the basis that they should be read together and given a harmonious construction. I disagree.
As noted earlier, the text of para 17.2.1 b) is framed in terms that cast an obligation on Sensis to “take steps to redeploy the employee to a Reasonable alternative position, if available”: see also para’ 17.2.1 c). By contrast, para 17.2.1 d)(ii) was only engaged so as to disentitle an employee to redundancy payments where “the employee is offered and does not accept a Suitable Position.” While these provisions of the Sensis Agreement should be given a harmonious construction, this harmony should be achieved recognising that the Dictionary provided agreed meanings to the two expressions and that each of those expressions have work to do. I conclude that it would be wrong to read para’s 17.2.1 b) to d) as though the expressions Reasonable alternative position and Suitable Position were synonymous: Project Blue Sky Inc, supra (1998) 194 CLR 355, [71].
Paragraph 17.2.1 b) affords Sensis an opportunity to redeploy an employee whose position has been made redundant. In this context, redeploy means no more than that the employee who is to be dismissed because of the redundancy of their position is able to avoid that outcome because it is feasible to redeploy them to another position which is available, vacant and suitable to their skills, ability and experience: Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99, [167] (Jessup J)
It may be noticed that Sensis’ witnesses cavilled at the suggestion that Mr Gundi was re-assigned to the role of Business Development Consultant. In the approach taken by Sensis, Mr Gundi was employed upon the same contract, in the same title, with the same responsibilities and remuneration and the same opportunities for commission.
I disagree that, upon the criteria stipulated by the Dictionary, the remuneration, seniority, skills and experience of the two roles were comparable. The terms remuneration, seniority, skills and experience are protean expressions which admit of wide and narrow meaning. On Sensis’ case, it was unnecessary to look beyond the terms of the employment contract and company policies, so as to provide the foundation for a conclusion that the roles were to all intents, the same or at least comparable. On Mr Gundi’s case it was more appropriate to take a wider view of the text and to construe it in a manner that was consistent with the language and purpose of the clause and the Sensis Agreement as a whole. On this approach, each paragraph of cl. 17.2.1 might be read through a lens that would, prima face, give effect to harmonious goals of the clause, adjusting the meaning of the text to achieve a result that would best give effect to the purpose and language of each provision but maintain the unity of the clause as a whole: cf Project Blue Sky, supra; Independent Commission Against Corruption v Cunneen [2015] HCA 14, [2], [31]-[32], [57]-[59] (French CJ, Hayne, Kiefel and Nettle JJ), [97] (Gagelar J).
It seems clear that whether an employee is to receive comparable or equivalent pay in the proposed new role is regarded as an important and relevant consideration: cf Hot Tuna (1988) 27 IR 226 at 230-231; Re Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397, [26] (Richards SDP); Vicstaff Pty Ltd v May (2010) IR 233, [25] (Bissett C); Spotless Services Australia Pty Ltd (2013) FWC 4484, [14] (Sams DP); Stratacrete Pty Ltd [2016] FWC 2880, [10] (Asbury DP).
In the years before 2016 when Mr Gundi was employed as a Media Sales Advisor he was provided a list of existing customers for whom he had management responsibility. He spent the vast majority of his week ‘on the road’ serving the needs of those existing customers. He derived commission from undertaking those responsibilities and achieved the monthly targets and received the bonuses in most months. His Account Director, Mr Salter considered that Rob was good.
Sensis submitted that Mr Gundi was doing little more than giving his subjective assessment of what it described as the ‘rebalanced’ role. I reject that submission. I consider that Mr Gundi was entitled to give evidence, having formed an assessment based upon his skills and years of experience as a Media Sales Advisor, of what effect the removal of his portfolio of existing customer list would have upon his monthly remuneration. Predictions and assumptions about the future are necessarily not susceptible of scientific proof and it is accepted as relevant that proof of past events having occurred often provides a reliable basis for informing the probability of their recurrence: cfCDJ v VAJ (1998) 197 CLR 197, [151] (McHugh, Gummow and Callinan JJ); Minister for Immigration & Ethnic Affairs v Guo (1997) 191 CLR 559, 574 (per curiam); Malec v J C Hutton Proprietary Limited (1990) 169 CLR 638, 639-640 (Brennan and Dawson JJ), 642-643 (Deane, Gaudron and McHugh JJ).
Mr Salter’s email confirmed unambiguously that Mr Gundi’s portfolio of existing customers would be removed from him once the reassignment of his existing position took effect. I do not accept that the removal of that list of existing customers, and the correlative removal from Mr Gundi’s role as Media Sales Advisor for responsibility for the day to day management of those customers was not relevant to a consideration whether the two roles were comparable.
Sensis adduced evidence in chief from Mr Harwood that the results of one Media Sales Advisor improved in 2016 compared with his results in the 2015 sales cycle. I do not regard that evidence as a cogent response which negates the evidence of Mr Gundi as to how he considered the removal of the portfolio of 200 existing customers would affect his remuneration by way of commission and bonuses. Although Sensis adduced this viva voce evidence from Mr Harwood, Sensis made no attempt to prove what was the remuneration of Media Sales Advisors assigned only to undertake new business acquisition in the 2016-2017 sales cycle. Had Sensis wanted to produce business records demonstrating that fact it might be expected to have done so without difficulty. Much of the documentary evidence Sensis did adduce was comprised of relatively peripheral documents.
I find that Sensis did not offer Mr Gundi a Reasonable alternative position and that he was not redeployed to such a position. There was no sufficient correlation between Mr Gundi’s current role and the alternative role that was proposed by Sensis. The correlation was insufficient because of the complete removal of the portfolio of existing customers and the responsibilities that the management of those existing accounts entailed, coupled with the substitute requirement whereby effectively 100% of his work was only to spot and cold call for new custom.
In those circumstances, it also follows that the qualifying criteria in para 17.2.1 c) are made out; namely: (i) Mr Gundi was made redundant; (ii) Sensis did not redeploy Mr Gundi to a Reasonable alternative position; (iii) accordingly, Mr Gundi’s employment was terminated. Subject to the operation of para 17.2.1 d)(ii) Mr Gundi was entitled to receive the redundancy payments for which para 17.2.1 c) provided.
Exclusion from liability
The defined term Reasonable alternative position only has work to do where para’s 17.2.1 b) or c) are under consideration. For the purposes of para 17.2.1 d)(ii), the question is not whether Mr Gundi was offered a Reasonable alternative position, but whether he was offered a Suitable Position that he did not accept. Sub-clause 1.2 of the Sensis Agreement defines the expression Suitable Position as follows:
Suitable Position:An offer of employment that is on terms and conditions substantially similar to, and considered on an overall basis, no less favourable than, the relevant employee’s current terms and conditions of employment, and which recognises the relevant employee’s service with Sensis for the purpose of calculating entitlements under the Act.
In contrast with the criteria specified by the definition of Reasonable alternative position, the criteria applicable to a Suitable Position are, in my opinion, of broader content. This conclusion has three potential consequences. First, the exclusion of liability for redundancy payments is potentially of wide import. Secondly, there is a wider range of considerations brought into play in the determination whether a position meets the criteria of being suitable. Thirdly, the objective evaluation whether Sensis has made an offer of employment that constitutes a Suitable Position entails consideration of a wider scope than that which is called for in deciding whether an employee had been redeployed to a Reasonable alternative position. A conclusion that the position to which an employee had been redeployed did not constitute Reasonable alternative position may go a long way in answering the separate question whether Sensis had made the offer of a Suitable Position.
A position is a Suitable Position where it is an offer of employment:
(a)that is on terms and conditions substantially similar to, and considered on an overall basis, no less favourable than, the relevant employee’s current terms and conditions of employment, and;
(b)which recognises the relevant employee’s service with Sensis for the purpose of calculating entitlements under the Act.
Insofar as any distinct offer was made, it is to be gleaned from the communications from Mr Salter to Mr Gundi.
At this level, Sensis’ case became complicated by reason of the stance that it took. It denied that there was any restructure, that Mr Gundi’s position was made redundant or that he was assigned to the position of Business Development Consultant. The lacuna in the case then was that, if Mr Gundi’s position had been made redundant, it fell to Sensis to establish that it had either redeployed Mr Gundi to a Reasonable alternative position or that it had offered, and Mr Gundi had not accepted, a Suitable Position. Whichever course be adopted, it was for Sensis to distinctly prove that offer, what the content of the position was and that it had not been accepted.
I have found that there was a restructure and that Mr Gundi’s position was made redundant. In the way the case was conducted, Sensis appeared to treat the direction to the role of Media Sales Advisor with responsibility for only new business acquisition as being an offer. I conclude that such an offer may be inferred from the parties’ conduct. The consequence of that inference is that I have regard to Mr Salter’s communications, oral and written, in attempting to glean the terms of the offer and the nature of the Suitable Position.
It may be accepted that Sensis’ offer of employment was on terms and conditions substantially similar to the current contract with Mr Gundi, and that it recognised his service with Sensis for the purpose of calculating his entitlements under the Act.
However, I do not accept that Sensis made an offer of employment to Mr Gundi that was on terms or conditions substantially similar to, or considered on an overall basis, no less favourable than, the current terms and conditions of his employment. Given the principles applicable to the proper construction of an enterprise agreement to which my attention was drawn, I conclude that the expression Suitable Position should be construed in the manner likely to be understood in an industrial relations setting. For that reason, I adopt the statement of principles above as concern the proper construction of Reasonable alternative position as being applicable to the proper construction of the expression Suitable Position. The expression should be construed fairly and liberally as the court would suppose two honest persons of business would understood the words used in the agreement and in that setting: cf Cohen & Co v Ockerby & Co Ltd (1917) 24 CLR 288, 300 (Isaacs J).
I also consider that para 17.2.1 d)(ii) should be construed by giving it a harmonious construction with the remainder of cl. 17.2.1 and having regard to the purpose for which that clause was included in the Sensis Agreement. More precisely, para 17.2.1 d)(ii) is to be construed in a setting that assumes the employee’s position has been made redundant and that the employee has not been redeployed to a Reasonable alternative position; that is, the work of para’s 17.2.1 a) - b) are done. Further, for the same reasons, the first of the qualifying criteria in para 17.2.1 c) is treated as satisfied. In my opinion, the meaning that should properly be assigned to the general words in para 17.2.1 d)(ii) is constrained by each of those considerations: cf CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey and Gummow JJ), 412 (Gaudron J agreeing).
The true meaning of Suitable Position is then ascertained on the footing that para’s 17.2.1 a) - d) were intended to give effect to harmonious goals. Those goals included that: (1) the Sensis Agreement would provide an agreed definition of the circumstances in which an employee’s position was redundant; (2) Sensis would have an opportunity to redeploy an affected employee to a Reasonable alternative position; (3) where redeployment was not possible, an employee became entitled to redundancy payments; (4) the entitlement was excluded in three defined circumstances; (5) one of the bases on which the entitlement was denied was where Sensis had offered, but an employee had not accepted, a Suitable Position; (6) the offer of employment should be on terms substantially similar to, and considered on an overall basis, no less favourable than, the employee’s current terms of employment. To the extent that it may be necessary to adjust the meaning of Suitable Position, to give that expression a meaning that will best give effect to the purpose of the Sensis Agreement as a whole, I note that cl. 6 of the agreement which contains special provisions for Sales employees provides in sub-cl. 6.1 that:
Overtime
Unlike other employees at Sensis, Sales employees receive remuneration based on salary and commission. Accordingly, no overtime is payable to Sales employees. (emphasis added)
Sub-clause 6.1 might fairly inform the proper construction of Suitable Position, particularly when regard is had to the need to assess the offer of employment on an overall basis: see also cl. 6.3 of the agreement (Commission); cl. 1.2 (Dictionary – Sales employees) and Schedule 1 (Sales employees – Media Sales Advisor).
In construing and applying para 17.2.1 d) ii) in the present case, I adopt each of the considerations which support my conclusion that Mr Gundi was not redeployed to a Reasonable alternative position. Considered on an overall basis, the ‘offer’ by Sensis that Mr Gundi should work as a Media Sales Advisor, give up his portfolio of existing customers and spot and cold call for new custom was not a Suitable Position. I do not regard it as an adequate answer to contend that Mr Gundi had the same opportunity to earn commission in each role. For all practical purposes, the roles were, as Mr Langmead submitted, completely different. Sensis has not established that Mr Gundi was offered a Suitable Position within the meaning of para 17.2.1 d(ii) and in those circumstances no occasion arose for him to refuse any such position.
It follows that the entitlement to the redundancy payments conferred by para 17.2.1 c) is not denied by operation of para 17.2.1 d)(ii). The entitlement to such payments is made out.
Quantum
Mr Gundi has established an entitlement to a redundancy payment calculated in accordance with cl.17.2.1 c). Where it applies, cl.17.2.1 of the Sensis Agreement creates an entitlement to payment of stipulated sums. Paragraph 17.2.1 c) of the agreement prescribed the formula for calculation of redundancy pay under cl. 17.2.1 as follows:
(i) 5 weeks’ notice or pay in lieu of notice; and
(ii) . . . and redundancy pay calculated as follows:
Period of continuous service on termination Redundancy pay
Entitlement
Up to and including 1 year 4 weeks
For each subsequent year of continuous service 3 weeks
Total Maximum payment 52 weeks
As the text of that clause provides, the three components in the calculation are relevantly: (1) 5 week’s pay in lieu of notice; (b) 4 weeks pay for the first year of service; (3) 3 weeks pay for each subsequent year of continuous service.
Mr Gundi commenced employment in February 2008 and, by operation of cl.17.2.1 c), his employ was terminated in April 2016. I conclude, subsequent to his first year of employment, that he had a further 7 years of continuous service. There was no issue raised as to the scope of the expression ‘subsequent year of continuous service’.
Mr Gundi claimed an entitlement calculated on the basis of 30 weeks pay being: (a) 5 weeks pay in lieu of notice; (b) 4 weeks pay for his first year of service, and (c) 3 weeks pay for each of the 7 subsequent years of continuous service. I agree in the formulation of the claim to redundancy pay for a sum equivalent to 30 week’s pay.
Mr Gundi claimed that that entitlement was quantified at $42,132.12. Sensis said nothing to the contrary. I accept that quantification. While I will defer the question of interest, I note that the Federal Court Practice Note CM 16 describes a basis on which interest may be calculated.
Contravention
Mr Gundi claimed also that the failure to pay the redundancy payment constituted a breach of s 50 of the Act. Section 50 provides that a person must not contravene a term of an enterprise agreement.
The parties’ pleading simply joined issue on the claim for an alleged contravention of s 50 and they made no submissions in relation to the scope or operation of the section, appearing to treat the claim for contravention of the provision as following the result of the claim for payment of redundancy pay. I will adopt that lead.
There was no suggestion that the Sensis Agreement did not apply to Mr Gundi: see sub-s 51(1).
The meaning of the term contravene includes ‘fail to comply with’: see s 2B Acts Interpretation Act 1901 (Cth). In my opinion, the failure of Sensis to pay Mr Gundi the redundancy payments prescribed by cl. 17.2.1 c) constituted a failure to comply with the obligation expressed in that clause and accordingly, I find a contravention of s 50 is made out.
Pecuniary penalties
The parties conducted the trial on the basis that any question of penalty be deferred until after delivery of judgment on the question of redundancy. I will direct the parties to file submissions which address any applicable legal principles and matters of fact as they consider relevant to the determination of these issues.
Motor vehicle allowance
As concerns the motor vehicle allowance, Mr Gundi pleaded as a term of the second contract that he received remuneration including a fully maintained motor vehicle and that, with effect from January 2016, his remuneration included a vehicle allowance of $17,429 per annum. Sensis pleaded that any such vehicle or allowance was provided pursuant to a Sensis motor vehicle policy – which policy did not form part of the employment contract with Mr Gundi. Sensis further admitted that, as at January 2016, the vehicle allowance was $17,429 maintaining that that allowance was provided pursuant, but subject, to the policy.
It was common ground that any entitlement to a vehicle allowance arose under that policy and that the sum of the allowance was $17,429 at the material time. On this branch of the case, the central question concerned the nature of the rights attaching to that allowance.
As noted above, the second contract expressly provided that the motor vehicle policy was not part of the employment contract and did not create enforceable rights in favour of Mr Gundi. To similar effect, cl. 21 of the second contract also provided in relation to company policies that they did “apply to your employment, [but] they do not form part of your contract of employment . . .”
In addition, the Sensis Agreement provided a Dictionary definition of Sales employees which included Media Sales Advisors. As noted, cl. 6 of the Sensis Agreement addressed the subject, Special provisions for Sales employees, and by sub-cl. 6.4 stated that:
Where a car is required for performance of a role, Sensis may provide eligible employees with a Tool of Trade vehicle or a car allowance for work purposes in accordance with Sensis policy as amended from time to time.
The state purpose of the Sensis Motor Vehicle policy included that it provide a ‘framework’ for Sensis to effectively manage its motor vehicle fleet and vehicle allowance (cl. 1). It was agreed that the policy applied as between Sensis and eligible employees (cll. 2, 4 a)). Clause 3 of the policy provided certain definitions including as to a Tool of Trade (cl. 3.1) and a Vehicle Allowance (cl. 3.3) which stated in part:
Vehicle Allowance: An allowance paid in lieu of a Tool of Trade vehicle. . . . This allowance is paid to eligible employees to compensate them for all costs incurred in connection with the use, operation and maintenance of a private vehicle to carry out the core responsibilities of their role. . .
Clause 5 of the policy is entitled Employee rights and responsibilities. On my examination of that clause, it confers no rights. None of cll. 6-8 appear relevant. Clause 9 concerns the topic, Vehicle allowance. Sub-clause 9 b) described Payment of the allowance and stated in part:
This allowance is paid fortnightly and is provided to cover the cost of finance, fuel, repairs, maintenance, insurance, registration, e-tags, and any other costs incurred . . .
Nothing in cl. 9 suggests that Sensis placed any limitation on the entitlement of an employee to payment of the vehicle allowance.
Clause 10 of the Sensis motor vehicle policy provided in part as follows:
Extended leave
Sensis provides eligible employees with . . . [an] allowance to enable them to perform the core responsibilities of their role. If (sic) A workplace participant is absent on extended leave, the following conditions will apply:
a. Personal leave
If a workplace participant is absent on paid or unpaid personal leave for a period of 20 consecutive days or more:
a) Sensis will cease paying the workplace participant a vehicle allowance.
b) . . .
Clause 11 of the policy addressed transitional arrangements. Relevantly, it specified that the annual allowance of $17,429 was payable to a person in Mr Gundi’s position.
Neither of cll. 12-13 of the policy is relevant.
It will be recalled that, in Mr Salter’s view, as a Media Sales Advisor, Mr Gundi spent the majority of his time each week ‘on the road.’
Mr Gundi gave evidence that he had originally been provided a company car but that in 2015 there had been a change in policy with the result that he was instead provided a car allowance of $17,000 on top of his base salary. He said that at no time was he told that the car allowance was not payable if he went on leave for any period.
Mr Harwood gave evidence without objection in relation to the Sensis motor vehicle police which, he said, provided for suspension of the allowance after a period of 20 days consecutive personal leave. Sensis policy of suspending the allowance was explained by Mr Harwood as grounded upon a rationale that an employee on unpaid personal leave who had been absent for more than 20 consecutive days had no need to use their own vehicle for work related purposes and so, as I understood it, had no entitlement to an allowance. Asked about this evidence, Mr Harwood said in cross-examination that in 2015 he was not managing the face to face team and that what he had said about the Sensis motor vehicle policy was based upon what he had been told by others. Why or how any of this evidence was relevant was not explored.
On 15 March 2016, Mr Harwood sent Mr Gundi an email attaching a copy of the Sensis motor vehicle policy and advised him that his motor vehicle allowance had been suspended. The email drew attention to cl. 10 of the policy which, in terms, provided for suspension as described.
Mr Harwood’s evidence was that he received a phone call from Mr Gundi at around the time of the email sent on 15 March 2016. Mr Gundi said that his allowance had been suspended. Mr Harwood, who said he would look into the matter, ascertained that Sensis had been in error in suspending the allowance. Arrangements were made to rectify the error with the result that Mr Gundi was paid a motor vehicle allowance up to 22 March 2016.
Mr Gundi swore that he was not paid any motor vehicle allowance in relation to the period 22 March 2016 – 18 April 2016. He submitted that he was on paid personal leave and that he was entitled to payment of a vehicle allowance. Sensis points to the fact that Mr Gundi did not attend work at all from 24 February 2016 and that after Mr Gundi’s absence for 20 consecutive work days, his vehicle allowance was suspended.
Objectively, I cannot to conclude that the motor vehicle policy was incorporated by reference or was otherwise intended to form part of the second contract: cf Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193, [111] (North J), [129] (Mansfield JJ), (Lindgren J diss’); Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784, [234]ff (Wilcox J); on appeal Goldman Sachs JB Were Services Pty Ltd Nikolich [2007] FCFCA 120, [19], [22], [97] (Black CJ), [119]ff (Marshall J), [282]-[290] (Jessup J diss); see also Commonwealth Bank of Australia v Barker [2013] FCAFC 83, [366] (Jessup J diss’) (rev’d on appeal); Commonwealth Bank of Australia v Barker (2014) 53 CLR 169; Westpac Banking Corporation v Wittenberg [2016] FCAFC 33, [83]-[113] (Buchanan J), [336]-[338] (McKerracher J) [344]-[335] (White J).
In the face of the express terms of the second contract concerning the motor vehicle policy, I cannot conclude that the parties intended that policy would form part of their contract. For the avoidance of doubt, the evidence surrounding the entitlement to payment of commission – including the terms of cl. 6.3 of the Sensis Agreement which had been made in 2014 – does support a conclusion that the parties intended that rights to commission would attach to the second contract. The different conclusions that I reach in relation to the two distinct company policies serves to illustrate that an evaluation of all of the evidence will be important to a decision whether parties intended a particular policy to attach to an employment contract. The terms of the second contract indicate a practice by Sensis to issue and amend myriad policies. There is no universal rule.
The conclusion that the motor vehicle policy was not intended to form part of their contract is fatal to the contractual claim for non-payment of the vehicle allowance for the period after Sensis suspended payment.
Damages
Mr Gundi pressed alternative claims for damages grounded upon the failure to pay the sum of his redundancy payments and the amount claimed in relation to his motor vehicle allowance.
In failing to pay the redundancy payments, Sensis committed a serious breach of the second contract: Westen v Union des Assurances des Paris ((1996) 88 IR 259, 261 (Madgwick J). The breach was accepted by Mr Gundi. Upon termination, both parties were discharged from further performance but rights which had accrued to that point and causes of action that accrued from the breach continued unaffected: McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457, 476-7 (Dixon J). Although the second contract was terminated with effect from April 2016, Mr Gundi held a good cause of action for enforcement of the right to payment of the redundancy payments. The breach of that obligation sounded in damages in a sum equal to the amount of those payments.
In light of those damages being for the same sum as the entitlement to redundancy payments no question arises as to Mr Gundi exercising an election between the two remedies.
Conclusion
The applicant is entitled to relief in relation to his claim for redundancy payments, together with interest. The claim for payment of the motor vehicle allowance is not made out. Questions of damages overlap with the relief granted for non-payment of the redundancy payments. Contravention of s 50 of the Fair Work Act is established. The factual and legal issues related to what penalty (if any), should issue are matters the parties agreed be dealt with in a later hearing (if necessary). The applicant abandoned a claim for costs: cf s 570 of the Act.
I certify that the preceding two hundred and fifty eight (258) paragraphs are a true copy of the reasons for judgment of Judge A Kelly
Date: 27 June 2017
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