Heintje Lange v Bickford's Australia Pty Ltd
[2020] FWC 613
•4 MARCH 2020
| [2020] FWC 613 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Heintje Lange
v
Bickford’s Australia Pty Ltd
(U2019/11463)
COMMISSIONER HAMPTON | ADELAIDE, 4 MARCH 2020 |
Application for an unfair dismissal remedy – preliminary jurisdictional issue – whether genuine redundancy – winemakers – multiple roles combined – whether job no longer required – whether consultation requirements of modern award met – whether reasonable redeployment options overlooked – duties continued but job no longer required due to operational changes – new role with broader management responsibilities - merit of changes beyond the scope of this matter – consultation after a decision had been made was undertaken and requirements met – whether reasonable in the circumstances that applicant be redeployed into the new position – other positions and work assessed and not reasonable to redeploy – new position not agitated by the applicant as redeployment option but arises from the facts of the matter – whether distinction between selection for redundancy and selection for redeployment – evidence supports the position that objective assessment made about relative merit of the two winemakers and reasonable conclusion in the circumstances – found on balance that not reasonable in all of the circumstances for applicant to have been redeployed within the employer’s enterprise or the enterprise of an associated entity – genuine redundancy found – application dismissed.
1. What this decision is about
[1] Mr Heintje Lange has made an application seeking a remedy for an alleged unfair dismissal under s.394 of the Fair Work Act 2009 (the FW Act). The respondent in this matter is his former employer, Bickford’s Australia Pty Ltd (Bickford’s or the Respondent).
[2] Mr Lange was employed as the Winemaker at the Step Road Winery operated by Bickford’s (the Winery) until September 2019 when he was dismissed on the stated basis of a redundancy arising from structural changes to the senior management of the winery. At that time, the Winery also engaged a Technical Winemaker, Mr Fenton-Smith, as well as utilising a number of other leadership roles located at the Winery and within the Bickford’s group of companies more generally.
[3] According to Bickford’s, in September 2019, after discussions within senior group management over a number of months as to the efficiencies of the Winery from an operational and staffing perspective, and after determining that the Winery would likely incur a significant loss in that financial year, Bickford's determined that:
• A structural change was required in the operations of the Winery;
• A single Winery Manager role would be implemented; and
• The roles of Winemaker and Technical Winemaker at the Winery were to be made redundant.
[4] Ultimately, Mr Fenton-Smith was selected to fill the new Winery Manager role. No suitable redeployment opportunities were available within the Bickford's group of companies for Mr Lange and on 24 September 2019, following three meetings regarding the proposal, the Applicant was dismissed as a consequence of the redundancy.
[5] Mr Lange disputes many of the above contentions including the asserted rationale for the change, whether the Winery Manager role was in reality different to the Winemaker role he was undertaking at the time, and the bona fides of the consultation and redeployment processes.
[6] Mr Lange was provided with 4 weeks’ pay in lieu of notice and 14 weeks redundancy (severance) payment.
[7] Section 385 of the FW Act provides as follows:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[8] Bickford’s contends that Mr Lange’s dismissal was a case of genuine redundancy and this is in dispute. Section 396 of the FW Act provides that certain matters must be decided before considering the merits of an application and the issue of genuine redundancy is one such case. 1
[9] The meaning of genuine redundancy is set out in s.389 of the FW Act in the following terms:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
[10] I will, only for convenience, describe the three elements of s.389 as being:
• Section 389(1)(a) – job no longer required due to changes in operational requirements;
• Section 389(1)(b) – compliance with consultation requirements of a modern award or enterprise agreement; and
• Section 389(2) – reasonable redeployment.
[11] It is common ground that the Wine Industry Award 2010, or in the alternative, the Miscellaneous Award 2010 applied to Mr Lange’s employment and that each modern award contains the same relevant consultation requirement. I observe that should Mr Lange already be performing the broader management role at the Winery as he contended, it would be unlikely that either modern award would apply to his employment. 2 If that was the case, s.389(1)(b) would not be engaged in this matter. Ultimately, for reasons that are set out in this Decision, I do not accept that the Applicant was in a broad management position as the Winemaker.
[12] As a result, in order to be a genuine redundancy, all three elements of s.389 of the FW Act must be met and Bickford’s contends that the Commission should be satisfied on all three matters.
[13] Mr Lange contests all three elements of s.389 and the matter has been the subject of a hearing. Bickford’s was represented with permission 3 by Ms Walker of counsel and Mr Lange represented himself with support from his wife, Ms Sindely, who also acted as his support person in some discussions during the consultation process leading to the dismissal.
[14] Given that Mr Lange was not professionally represented, I undertook a series of measures to facilitate a fair hearing consistent with s.577 of the FW Act and the Fair Hearings Code of Practice. These included detailed explanations of the issues and the proposed course of the hearing; latitude with the nature, and assistance with the course of the evidence; and appropriate adjournments to permit him to present his case at its highest point. However, both parties retained responsibility to provide and challenge relevant evidence.
[15] This decision deals only with the immediate issue as to whether Mr Lange’s dismissal was a case of genuine redundancy within the meaning of s.389 of the FW Act.
2. The cases presented by the parties
2.1 Bickford’s Australia Pty Ltd
[16] Bickford’s contends that having conducted a review of the Winery operations, forecasted production and financial performance, and senior staffing, it determined to restructure the senior staffing to introduce a single Winery Manager role incorporating the two Winemaker positions and a broader management role. Having made that decision in principle, it then consulted with the two employees affected, had regard to the positions advanced by Mr Lange in particular, and subsequently confirmed that it would proceed with the change and appoint Mr Fenton-Smith to the new role.
[17] Having also considered all then available roles within its business and a related company, including a position that Mr Lange indicated he may be interested in, it determined that there were no available roles within the Bickford’s group of companies that were suited to Mr Lange’s skills and experience, and as a result, he was made redundant and paid all relevant entitlements.
[18] Bickford’s contends that as a result, Mr Lange’s job was no longer required due to changes in its operational requirements and that this was a redundancy. Further, it had provided notice and consulted with Mr Lange as required by the relevant consultation requirements and had not failed to reasonably redeploy the Applicant.
[19] Bickford’s further contends that the fact Mr Lange did not agree with the proposed restructure and was not selected for the new role, did not mean that the change and consultation process was not genuine or at odds with the requirements of s.389 of the FW Act.
[20] This, it contends, meant that Mr Lange’s dismissal was a genuine redundancy within the meaning of the FW Act and the unfair dismissal application itself should be dismissed.
[21] Bickford’s relies upon the written and oral evidence of the following:
• Ms Donna Mahar – Group Human Resources Manager; and
• Mr Christopher Dix, Operations Manager – Regional Sites.
[22] Ms Mahar and Mr Dix were both directly involved in the decision-making and consultation processes at issue in this matter and were cross-examined during the hearing.
2.2 Mr Lange
[23] Mr Lange contends that Bickford’s did not comply with any of the three requirements of s.389 of the FW Act and that his dismissal was not a case of genuine redundancy.
[24] In relation to s.389(1)(a) – job no longer required due to changes in operational requirements, Mr Lange contends that:
• His duties as Winemaker were still required to be performed and that “handing over of the role of Winemaker to (Mr Fenton-Smith) with a title change did not constitute a genuine redundancy”; 4
• He was already undertaking the broader winery management role at the Winery site with Mr Dix earlier assuming a broader group role; and
• The Winery still required more than a single site Winemaker given the requirements of the winery operation including the need to manage the extensive volume of wine in storage.
[25] Mr Lange further contends that Bickford’s failed to meet its consultation obligations on various grounds including:
• He, as the existing site Winemaker, was not involved in the review of the Winery or the planning for the 2010 vintage as would be expected given his role;
• Bickford’s had made a definite decision to restructure months prior to him being made aware of a meeting during which he was advised of that outcome;
• The meeting to advise him of the decision was misleadingly titled “High level vintage 2010 winery planning” and he was given no warning as to the actual purpose of meeting or the attendance of Human Resources staff and was as a result, blindsided and not given an opportunity to have a support person present;
• The purported consultation with him about the matter was not genuine or fair as the Respondent had already determined the outcome and refused to allow him to discuss the merit of the changes or his capacity to undertake the new role;
• There was insufficient detail about, or justification for, the new role provided during the meetings;
• Other employees affected by the change within the Winery more generally were not consulted;
• Mr Fenton-Smith was advised of the decision, including the intention to appoint him to the new role, before Mr Lange was informed and this confirmed that the consultation with him (the Applicant) was not genuine; and
• Mr Fenton-Smith was not provided with the details of the changes in writing as required by the consultation clause of the modern award and this meant that the consultation did not comply with the relevant requirements more generally.
[26] In relation to s.389(2) – reasonable redeployment, Mr Lange contends that reasonable redeployment options within the Bickford’s group of companies were not fully explored. In particular, he contends that:
• He was advised at the outset that there were no redeployment opportunities available to him despite the fact that Ms Mahar was not fully aware of his employment history and there had been no discussion with him to that point;
• He had expressed an interest in a (Business) Analyst position and had the necessary transferable skills to undertake that role;
• He became aware after his dismissal of a Distillery Production Manager position in Queensland and he should have been considered for that role at the time of his dismissal; and
• There was no proper discussion about transferable skills and his capacity to undertake other available jobs such as a Bar Manager role within the Bickford’s Group.
[27] It also became apparent during the proceedings that Mr Lange, in effect, contends that it was reasonable that he be “redeployed” into the Winery Manager position, rather than Mr Fenton-Smith, and that the failure to do so was also not consistent with the requirements of s.389(2) of the FW Act.
[28] Mr Lange and Ms Sindely provided written witness statements and oral evidence, and each was cross-examined during the hearing.
3. Observations on the evidence
[29] There are some factual disputes in this matter, but largely they are matters of perspective, degree and emphasis. Where there is a direct factual dispute on a matter, I have resolved such having regard to the nature of that evidence, the degree to which the witness was able to give direct first-hand evidence about the issue, and my view about the credibility of the evidence generally.
[30] In general terms I found that each of the witnesses gave their evidence openly and with conviction, making appropriate concessions. I did however consider that some of the witnesses’ statements tended to subjectively summarise the proponent’s view about the thrust of some of the exchanges, rather than the detail of the discussion. As a result, I have treated those elements with caution.
[31] Where witnesses have purported to give evidence about the implications of the facts for the respective cases, I have treated those elements as submissions, noting that it is the Commission’s role to determine those matters.
4. The factual context
[32] The Bickford's group of companies comprises several business entities and sites, namely:
• Bickford's Australia Pty Ltd, the respondent in this matter, being the manufacturer of beverages including wine, beer, cider and gin products;
• Vok Beverages Pty Ltd (Vok), being the distributor of alcoholic beverages;
• Black Bottle Distilling which operates 23rd Street Distillery and Visitor Centre in Renmark;
• Make Wine which operates Step Road Winery in Langhorne Creek (the Winery in question);
• Inner Circle Distilling which operates Beenleigh Distillery in Eagleby, Queensland; and
• Beresford Estate which operates Beresford Wines at McLaren Flat.
[33] The Bickford's group of companies is a privately owned business.
[34] The two employing entities within the group are the Respondent in this matter and Vok.
[35] The Bickford’s Group purchased the Step Road Winery in 2012 as a going concern in circumstances where the former owner was in receivership. The Winery produces a number of varieties of wine, using its own and other regional grapes, that is bottled under various labels used by the Bickford’s Group. The Winery also produces cider and crushes fresh pomegranates.
[36] Mr Lange was employed within the Winery at the time of its purchase by Bickford’s, having been there since 2011. Although the timing is not clear on the evidence, it is likely that Mr Lange moved into the Winemakers role prior to the time of the sale of the Winery. I observe that Mr Lange’s title at the time included that of Winemaker/Winery Manager. 5 However, upon becoming part of the Bickford’s Group, Mr Lange’s role became narrower due to Mr Dix’s role and the implications of being part of the group more generally.
[37] Mr Lange holds a Bachelor of Agricultural Science Majoring in Oenology and had previously worked as a Winemaker, Assistant Winemaker/Cellar Hand, and various other roles in the wine industry from 2001 including as a Retail Salesperson, Cellar Supervisor, Cellarhand and Senior Cellarhand and Bottling Plant Operator.
[38] Although the formal reporting arrangements may not be consistent, the evidence reveals that Mr Lange, Mr Fenton-Smith and the Wine Operations Supervisor for most practical purposes reported to the Operations Manager – Regional Sites, Mr Dix. The Laboratory Quality Manager reported to Mr Lange. All other staff on site reported to the Wine Operations Supervisor.
[39] The most recent completed annual performance review conducted in relation to Mr Lange for 2018 6 noted that the Role Description needed some revision and updating. Mr Dix’s comments record that Mr Lange continued to collaborate across the business departments, had a strong technical grounding and had successfully manged staff resourcing and rostering to meet budget. However, the assessment also encouraged Mr Lange to be proactive in driving and facilitating the winemaking process – particularly as it applied to higher quality wines, taking a more structured approach to some planning, and to improving his email communication style. The 2019 appraisal process had not been concluded by the time of Mr Lange’s redundancy.
[40] During vintage periods, the focus of the entire management was the harvesting and initial stages of crushing and wine making. Outside of vintage, there was somewhat of a distinction between the two on-site winemakers. Mr Lange concentrated on taking existing blends and preparing the final wines for bottling and packaging.
[41] Mr Fenton-Smith’s role of Technical Winemaker involved him working under the leadership of Mr Lange and Mr Dix and he had a largely hands-on role in the blending and winemaking functions. Although he worked shift work along with the production staff during vintage, Mr Fenton-Smith also had a significant compliance role for the Winery and this required that he work extensively with other business units in the winery. Bickford’s considered that Mr Fenton-Smith had developed strong and positive business relationships in that context. 7 Mr Fenton-Smith’s role also concentrated more on the high-quality end of the range and fortified wines.8
[42] Mr Dix had previously been in the role of Chief Winemaker for the Bickford's Group and largely worked on the site of the Winery in that role. In November 2018, Mr Dix took on his present role whilst retaining responsibility to oversee all winemaking within the Group. This meant that Mr Dix retained overall formal responsibility and continued to work from the site of the Winery for around two days per week; and as a result he had a reduced, but still significant, hands-on role in the winemaking and management of the Winery. However, this meant that there was less day to day supervision of the winery by Mr Dix and some of this led to both Mr Lange and Mr Fenton-Smith having to broaden their roles to some extent.
[43] I observe that in late November 2018, Mr Lange, Mr Fenton-Smith and the Winery Operations Supervisor were advised by Mr Dix that with his new role, each of them would need to follow their existing roles and the objectives set for the winery and that a further review would be undertaken in June 2019. Mr Lange advised Mr Dix that he considered that he would be doing “higher duties” and should be compensated accordingly. This was followed up by subsequent emails from Mr Lange to Mr Dix and later to the Group Operations Manager and Mr Dix confirmed that Mr Lange was only expected to undertake the existing roles. The issue has not been formally advanced by Mr Lange.
[44] There were some further changes impacting upon the management roles at the Winery. In January 2019, a new role within the Bickford’s Group of Commercial Horticulture Manager was filled and involved that Manager taking up leadership responsibilities at the vineyard which resulted in the winery team being required to have less involvement with the vineyard including throughout vintage. This also assisted Mr Dix and allowed his role to more heavily focus upon activities at the Winery site than would otherwise have been the case. This new position also had some impact upon the focus of the two Winemaker roles.
[45] I also observe that in early January 2019, a Vineyard Supervisor and Operator at the Winery both retired and were not replaced.
[46] At the time of the events leading to the dismissal of Mr Lange, the staffing at the Winery included:
• Winemaker – the Applicant, Mr Lange;
• Technical Winemaker – Mr Fenton-Smith;
• Winery Operations Supervisor;
• Laboratory Quality Manager; and
• various Cellarhands.
[47] Based upon Mr Lange’s 2013 Role Description, 9 but allowing for the above changes that were not reflected into any updated document, I find that Mr Lange’s role in September 2019 could be described as follows:
“The primary purpose of this role is to ensure all winery operations, cellar management, cider and winemaking procedures are carried out in a way which optimises quality and efficiency according to required style profile.” 10
[48] The key decision-making roles contemplated:
• Staffing and resources required for vintage in conjunction with the Senior Winemaker (Mr Dix);
• Assignment of tasks and responsibilities to the Cellar Team;
• Input and assistance into the “develop product specifications” and style guidelines for all Make Wines Australia products; and
• In conjunction with the (Senior) Winemaker identity blending options that meet agreed style guidelines.
[49] In practice this included responsibilities to:
• Lead the winemaking function in conjunction with Mr Dix;
• Attend to matters relating to vintage production and processing including liaising heavily with Mr Dix, co-ordinating and assessing fruit, ensuring compliance records are in place, day to day overseeing of vintage operations;
• Assist in activities regarding the blending of wine ensuring product integrity, provision of samples and product specifications as needed;
• Oversee and manage cellar operations;
• Provide leadership to staff on site; and
• Coordinate the recruitment of additional team members during vintage and provide feedback to encourage the development of others in the business.
[50] Although the Role Description included the responsibility to liaise with the Environmental Protection Authority to ensure licensing requirements were met and Mr Lange was required to comply with health, safety and environmental and other polices, I do not consider that in practice Mr Lange carried responsibility for overall site management, compliance obligations around safety/environment, reporting, financial accountability, maintenance processes, accountability for site operations/performance or development of training plans for staff. Despite clearly being involved as the Winemaker, these responsibilities were undertaken by others within the management team including Mr Dix, and to some degree on the technical aspects, Mr Fenton-Smith.
[51] Following the completion of the 2019 vintage at the Winery, in around August 2019 Bickford’s Group Operations Manager and Mr Dix commenced discussions with Ms Mahar regarding the structure of the Winery business unit. I will for convenience describe this as the Review Group. These discussions did not involve Mr Lange or any other members of the Winery management team.
[52] In light of what Bickford’s considered to be the likelihood of the 2020 vintage crush of grapes being considerably lower than 2019, the amount of finished goods of wine already on hand, and the projected financial loss for the winery operations, the Review Group determined to review the current management structure at the Winery.
[53] In August and early September 2019, the Review Group formed the view that the Winery was top heavy in senior staffing, particularly in light of current and projected yields. It also considered that the Winery needed one Winery Manager to oversee the site operations and the staff, and to take full control of the winemaking responsibilities and processes.
[54] The Review Group contemplated that the position of Winery Manager role was needed and would take on the following responsibilities:
• Management of all winery operations including productivity and efficiencies, scheduling, purchasing, environmental and safety;
• Champion the site for continuous improvement, oversee preventative maintenance and develop operating systems for quality, safety, production and environmental controls;
• Attend to vintage processing and production including managing all fruit intakes, winemaking operations and record keeping;
• Overseeing cellar operations;
• Attending to blending, production and product integrity of the wine;
• Regular reporting to Management on the operational efficiencies of the winery against set KPls Including involvement in budget development and taking on accountability for achievement of annual expenditure and operating budgets;
• Technical compliance and training;
• Development of wine knowledge and connection back to sales/marketing teams;
• Undertaking field and promotional activity; and
• Leadership and people management of on-site staff. 11
[55] The Review Group also formed the view that with a Winery Manager role in place, the roles of Winemaker and Technical Winemaker involved some duplication, would not be required, and so would become redundant. That is, the operations of the Winery would involve:
• A Winery Manager;
• A Winery Operations Supervisor;
• A Laboratory Quality Manager; and
• Cellar Hands.
[56] All roles held at the site would report directly to the new position of Winery Manager.
[57] The Review Group further considered the current structure and the incumbents in those current roles and agreed that Mr Fenton-Smith was the preferred candidate to take on the Winery Manager position. They also considered that he had the appropriate qualifications, functional skills and leadership behaviours to take on what they considered to be a new managerial and leadership position. This view was based largely upon the recommendation of Mr Dix who had worked with and observed both Mr Lange and Mr Fenton-Smith in their respective roles.
[58] I consider that the Winery Manger role as contemplated by the Review Group involves a combination of the roles and functions previously undertaken by Mr Dix – at least in terms of his on-site management and accountability role at the Winery, and those undertaken by Mr Lange and Mr Fenton-Smith.
[59] The position adopted by the Review Group could properly be described as a decision that would be applied subject to the consideration of any contrary views from those to be consulted. This position was adopted some time immediately after 10 September 2019 based upon an email recommendation made by Ms Mahar on that date.
[60] On 13 September 2019, Mr Dix met with Mr Fenton-Smith and advised him of the proposed restructure. Mr Dix also sought an indication that Mr Fenton-Smith was interested in taking the Winery Manager role, which he was. Mr Dix’s evidence is that he did not make an offer of employment in the proposed new role to Mr Fenton-Smith at that time. Although Mr Lange in final submissions contended that this was not correct, Mr Dix was not challenged on this issue and there is no contrary evidence that would lead me to doubt Mr Dix’s evidence. I observe that there is no indication that Mr Fenton-Smith was provided with written information about the proposal at that time.
[61] On 16 September 2019, Mr Dix contacted Mr Lange and set up a meeting to discuss “High level vintage 2020 planning”. There was no indication given that this meeting would involve discussion of the proposed restructure.
[62] On 17 September 2019, Mr Dix and Ms Mahar met with Mr Lange to advise him of the proposed restructure. At the outset, Mr Lange expressed surprise that Ms Mahar was present and Mr Dix indicated to the effect that the reason would become clear.
[63] During this meeting, Ms Mahar and Mr Dix explained the broad context for the review including the financial challenges and likely reduced tonnage forecast for the 2020 vintage and that the required efficiencies (productivity) of the Winery were not being met. Mr Lange was also informed to the effect that to achieve the goal of better efficiencies, better site management and to reduce overhead costs, it was proposed that a Winery Manager position would be created. He was also informed that if implemented this would result in his role being made redundant and that having considered the current incumbents, the Respondent felt that Mr Fenton-Smith was best placed to take on the Winery Manager's role based on performance, skill set and behaviours.
[64] Mr Lange queried why he had not been involved in any form of initial consultation given his role as the Winemaker and why he had not been offered the opportunity to apply for the position “handed” to Mr Fenton-Smith.
[65] Ms Mahar also advised that based upon her knowledge of Mr Lange’s skills, experience and qualifications, she did not believe that Bickford’s had a suitable alternative position to offer the Applicant. I note that Ms Mahar was relying upon a limited personal understanding of Mr Lange’s work history but also upon advice provided by Mr Dix. In any event, Mr Lange was advised of what was described as all current vacancies within the Bickford’s Group including:
• Analyst role with the Finance/Administration team based at Salisbury South;
• Venue Manager at 23rd Street on Melbourne bar venue in North Adelaide;
• Merchandiser with the South Australian Bickford's Sales team;
• Software and Web Application Developer based at Salisbury South;
• Key Account Executive in the Vok Beverages Sales team based in Queensland; and
• Head Chef at the 23rd Street Distillery in Renmark.
[66] Mr Lange was invited to consider any of these roles and he indicated interest in the Analyst position. I observe that the Role Description for this role was subsequently provided to Mr Lange. At the conclusion of the meeting the Respondent’s representatives explained to Mr Lange that he was being presented with the proposed changes and would be given time to consider and make any suggestions he would like to put forward as to alternative structures that allow him to stay with the business and also to further consider the redeployment options. Mr Lange was also advised about the redundancy payments that would flow if he left the business and was advised to discuss his circumstances with his family. Although Ms Mahar did indicate that the Respondent could arrange for his personal property to be returned if Mr Lange did not want to return to the business for the meetings, I do not find that she mentioned resignation or expressly invited that outcome.
[67] Mr Lange was given the rest of 17 and 18 September 2019 off on full pay to consider his position in the context of another meeting to be conducted on 19 September 2019. A letter was provided to Mr Lange on 17 September 2019 in the following terms:
“… …
As discussed with you today, I confirm:
• Bickford's Australia Pty Ltd (Bickford's) operates in a challenging environment and as such must ensure our structures support effective and efficient operations.
• Based on the activities of the winery over the last few years, wine product on hand, forecasted sales volumes and the direction of the Company's wine portfolio we anticipate we will produce a significantly lower volume of wine in the 2020 vintage versus prior years.
• As a result we have undertaken a thorough review of the Step Road Winery resources and structure, carefully considering the most effective structure given the needs of the business now and in the future and with a view to streamlining processes and increasing efficiencies in light of the reduced wine production volumes.
• An outcome of this review is that we feel the current structure is not commercially viable and, given the production volume and operational needs of the site, we must look to consolidate the Managerial and Leadership resources at the site.
• After careful assessment we believe the most effective way to achieve that consolidation is to appoint the Technical Winemaker (being the position currently held by Chad Fenton-Smith) to oversee and manage all winemaking and site operations.
• Should we make this proposed change your position of Winemaker would be absorbed into this one central winemaking and site managerial position and as a result, if we were to move forward with this proposal, we would look towards making your role of Winemaker with the organisation redundant.
• We have considered whether there is an alternative role within the Group for you and unfortunately we have not been able to identify a suitable position but would be happy to discuss this and all other current vacancies with you further.
• We asked that you consider the situation and come back to us with your thoughts and feedback and any alternative suggestions as to how you may continue as an employee within the organisation.
Redundancy Entitlements
As mentioned to you at our meeting, if your role was to be made redundant, we would provide you with the following:
Notice – a minimum of four (4) weeks' notice;
Redundancy Pay – fourteen (14) weeks' redundancy pay; and
Entitlements – all accrued annual and long service leave would of course be paid out to you at the time of your termination.
It is with regret that we have come to this commercial decision. Could you please consider the above and then I suggest we re-meet on Thursday 19 July (sic) 2019 to discuss further.
… …” 12
[68] At the subsequent meeting on 19 September 2019, Mr Dix and Ms Mahar met with Mr Lange who was accompanied by Ms Sindely. During the meeting, Mr Lange challenged the decision to restructure the winery management and the basis upon which it had been considered. This included the assumptions that had been made about the extent of proposed grape crush for 2020 and received what he considered to be a vague and inaccurate response from Mr Dix. Mr Lange also contended that the amount of wine in storage required that the (separate and probably additional) role of Winemaker be retained and there was a long discussion about the associated perspectives on that and the related matters including the impact of the proposal upon the role and responsibilities of the Cellar Supervisor and the Laboratory Manager. It was suggested by Mr Lange that these employees should also be consulted, and Mr Dix indicated that their role and functions would not be impacted by the proposed restructure. Further, the parties discussed whether there was a current (accurate) position description for the Winemaker role, Mr Lange’s perspective that it had not been updated to reflect the increased role following Mr Dix’s new role, and the differences between the proposed new role and the existing Winemaker position. Mr Dix contended that Mr Lange’s view was not accurate, and the meeting discussed competing views about who had, in fact, been responsible for dealing with staff development and appraisal issues.
[69] Mr Lange also objected to the process, including that he had not been consulted prior to the decision being advised to him. Mr Lange also repeated his contention that he had the necessary skill set and experience to perform the Winery Manager position and this should have been offered to him, with Mr Fenton-Smith being made redundant if the restructure was to proceed. There was also a relatively long discussion about that perspective and ultimately Ms Mahar indicated to the effect that there was no point in further discussing this view during the meeting.
[70] During the 19 September 2019 meeting, Mr Lange again expressed some interest in the Analyst position and although Ms Mahar may have indicated that she thought the Applicant would not be interested due to the significantly lower remuneration being offered, Mr Lange confirmed his interest and he was invited to supply information about his suitability for the role. I observe that Mr Lange later that day supplied a resume outlining, in the main, his wine industry experience.
[71] It was agreed that Mr Lange would be given more time to consider the issues and to provide any further information regarding the proposal in the lead up to an expected meeting in the following week.
[72] Later on 19 September 2019, Ms Mahar confirmed via email 13 Bickford’s view of the meeting and provided a copy of the draft Role Description for the proposed Winery Manager role. I observe that this description generally accorded with the explanation of the role given earlier and stated that the primary purpose of the role was as follows:
“The primary purpose of this position is to effectively manage the Winery operation taking total accountability for all activities on site including wine production, cellar management and general site operations ensuring the site and operation delivers in accordance with the set output plan and operates effectively within budget. 14”
[73] The 19 September email also set out the proposed redundancy package breakdown as requested by Ms Sindely during the earlier meeting. The email also requested that Mr Lange provide any further feedback about the proposed changes and/or alternative suggestion beyond the views already expressed in the meeting, and invited the Applicant to express any interest in relation to the various redeployment options discussed in the 17 September meeting.
[74] I observe that Mr Lange attended work on Friday 20 and Monday 23 September 2019 as usual. I also observe that on 20 September 2019 some tension arose about a difference of opinion between Mr Lange and Mr Fenton-Smith about an operational issue and Mr Lange’s perspective that Mr Fenton-Smith may be exercising authority that he (the Applicant) was not aware had been given to the Technical Winemaker. Mr Dix subsequently confirmed that no changes had been introduced and that it was business as usual with discussions (about the proposal) ongoing.
[75] The consultation meeting resumed on 24 September 2019, with Mr Lange represented by a Lawyer. Early in this meeting, Mr Lange was requested to advise if he had further feedback or alternative suggestions outside of those presented on 19 September 2019. No new or additional feedback was offered.
[76] Ms Mahar then advised that based on the resume provided and requirements of the Analyst role, the Company did not believe that Mr Lange was suitable to be redeployed into that position. Ms Mahar also requested Mr Lange to provide any additional information beyond his resume, in terms of further skills, experience or qualifications that may make him suitable for the role. No specific additional information was provided.
[77] Mr Lange further raised his concerns about the process the Respondent had adopted in making his role redundant, whether his role description was current, and again contested some of the apparent assumptions made developing the proposal. Mr Lange also raised the issue that had occurred with Mr Fenton-Smith on 20 September 2019 at the Winery site and the Applicant’s perspective that this indicated that additional authority had already been provided to the Technical Winemaker and the changes implemented. Bickford’s indicated that was not the case, no offer of employment had yet been made for the Winery Manager role. Rather, the proposed changes had only been put to Mr Fenton-Smith and his feedback received.
[78] The meeting was adjourned to enable Ms Mahar and Mr Dix to further consult with each other and with the Respondent’s General Counsel and Group Operations Manager about the proposed restructure and the feedback provided by Mr Lange. Bickford’s determined at that point to proceed with the proposal.
[79] The General Counsel then attended the resumed meeting and confirmed that a decision had been made to implement the proposed structural changes and Mr Lange was advised verbally of the Company's decision and notice provided that his role would now be made redundant. Mr Lange and his Lawyer engaged in brief discussions with the General Counsel about whether additional compensation could be paid for the redundancy, which was declined.
[80] Mr Lange’s dismissal, on the basis of the restructuring and the redundancy, was confirmed in writing 15 later that day.
5. The proper approach to the meaning of ‘genuine redundancy’ under section 389
[81] I will shortly turn to the major issues that arise in this matter. However, before doing so it is appropriate to consider the Commission’s approach to s.389 of the FW Act more generally as it might impact upon those major issues.
[82] I have set out the terms of ss.385 and 389 of the FW Act earlier.
[83] The Explanatory Memorandum to the Fair Work Bill 2008 explained the meaning of ‘genuine redundancy’ as follows:
“Clause 389 – Meaning of genuine redundancy
1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.
1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548. The following are possible examples of a change in the operational requirements of an enterprise:
• a machine is now available to do the job performed by the employee;
• the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.
1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.
1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.
1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.
1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.”
[84] Given s.385(d) of the FW Act, the fundamental question which arises is whether the Commission is satisfied that the dismissal was not a case of genuine redundancy. The respondent bears an evidentiary onus to demonstrate the factual elements of the objection. 16
[85] In Ulan Coal Mines Limited v John Howarth and others17 (Ulan Coal v Howarth), a Full Bench of the Commission held that:
“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
[18] In Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” (at par [27])
[19] In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the “jobs” of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 non-trades mineworker positions which were surplus to the Company’s requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.
[20] These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.”
[86] The FW Act does not define the term ‘operational requirements’. It is a broad term that permits consideration of many matters including:
• the past and present performance of the business;
• the state of the market in which the business operates;
• steps that may be taken to improve efficiency by installing new processes, equipment or skills, or by arranging labour to be used more productively, and
• the application of good management to the business.18
[87] Section 389(1)(b) requires compliance with the consultation requirements of, in this case, a modern award. I will deal with the requirements of this provision and the modern award shortly.
[88] In terms of s.389(2) of the FW Act, a Full Bench in the Ulan Coal matter19 observed:
“[26] First, s 389(2) must be seen in its full context. It only applies when there has been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of genuine redundancy the employer has a complete defence to the application. Section 389(2) places a limitation on the employer’s capacity to mount such a defence. The defence is not available if it would have been reasonable to redeploy the employee. The exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances.
[27] Secondly, it is implicit in the terms of s 389(2)(b) that it might be reasonable for an employee dismissed by one employer to be redeployed within the establishment of another employer which is an entity associated with the first employer. It follows that an employer cannot succeed in a submission that redeployment would not have been reasonable merely because it would have involved redeployment to an associated entity. Whether such redeployment would have been reasonable will depend on the circumstances. The degree of managerial integration between the different entities is likely to be a relevant consideration.
[28] Thirdly, the question posed by s 389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.”
[89] The approach adopted in the above matter should also be considered in light of the following comments of a later Full Bench 20 of the Commission:
“[34] Honeysett is authority for the proposition that for the purpose of s.389(2)(b) it is sufficient if the Commission identifies a suitable job or position to which the dismissed employee could be redeployed. The Commission must then determine whether such a redeployment was reasonable in all the circumstances. We note that given the factual context the Full Bench in Honeysett did not need to consider whether s.389(2) may be satisfied if the dismissed employee could be redeployed to perform other work within the employer’s enterprise (or that of an associated entity.) Given its particular factual circumstances Honeysett is not authority for the proposition that it is always necessary to identify a particular job or position to which the dismissed employee could have been redeployed.
[35] As we have mentioned, the use of the past tense in the expression ‘would have been reasonable in all the circumstances for the person to be redeployed ...’ in section 389 (2)(a) directs attention to the circumstances which pertained when the person was dismissed. As noted in Honeysett, ‘[T]he exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances’. The question is whether redeployment within the employer’s enterprise or an associated entity would have been reasonable at the time of dismissal. In answering that question the Full Bench in Honeysett observed that a number of matters are capable of being relevant:
“They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered”.
[36] We have earlier set out the submissions of the appellant and the respondent as to the proper construction of s.389(2) (see paragraphs [15] to [18] above). We accept the respondent’s submissions. For the purposes of s.389(2) the Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must also be an appropriate evidentiary basis for such a finding. Such an interpretation is consistent with the ordinary and natural meaning of the words in the subsection; the Explanatory Memorandum and Full Bench authority. We acknowledge that the facts relevant to such a finding will usually be peculiarly within the knowledge of the employer respondent, not the dismissed employee. If an employer wishes to rely on the ‘genuine redundancy’ exclusion then it would ordinarily be expected to adduce evidence as to the following matters:
(i) that the employer no longer required the dismissed employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
(ii) whether there was any obligation in an applicable modern award or enterprise agreement to consult about the redundancy and whether the employer complied with that obligation; and
(iii) whether there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employer.
[37] The evidence in relation to (iii) would usually include canvassing the steps taken by the employer to identify other work which could be performed by the dismissed employee.” (Citations omitted)
6. Was the dismissal of Mr Lange a case of genuine redundancy?
6.1 Job no longer required by the employer due to changes in operational requirements of the employer’s enterprise
[90] For reasons previously outlined, when consideration is given to whether changes in the operational requirements means that the person's job is no longer required to be performed by anyone, the test is not whether the particular duties performed by the dismissed employee survive the changes. Duties can be permissibly redistributed to other employees. The question is whether the job previously performed by the Applicant still exists.
[91] Further, the process of selecting which individual employee is to be made redundant is not relevant to determining whether a dismissal is a genuine redundancy, provided that the job is not required due to the operational changes and the other requirements of s.389 of the FW Act are met.
[92] I accept Mr Lange’s contention that many duties associated with his job as a Winemaker form part of the Winery Manager’s job. However, for reasons previously set out, the new position is objectively a combination of roles and duties, including those performed by the Technical Winemaker and elements of Mr Dix’s hands-on role, with a much wider winery management focus. Further, although Mr Lange holds potentially legitimate contrary views about the rationale for the changes and the reduction in overall winemaking expertise within the management structure, the evidence supports the notion that Bickford’s has restructured on the basis of a change in its operational requirements, has reduced the number of winemaker related positions at the Winery, and relevantly removed the position of Winemaker held by Mr Lange. The substantive merit of those decisions is not a relevant consideration in the present context.
[93] The role of Winery Manager was a genuine new position and not simply a rebadging of the Winemaker’s role. Mr Lange’s role was made redundant as a part of the restructure determined by Bickford’s based on its changing operational needs. 21
[94] I find that Mr Lange’s job as the Winemaker at the Winery concerned was no longer required by Bickford’s due to changes in operational requirements within its enterprise. This satisfies the requirements of s.389(1)(a) of the FW Act.
6.2 Compliance with consultation requirements of a modern award or enterprise agreement
[95] Clause 8 of the Wine Industry Award 2010 and the Miscellaneous Award 2010 each provides as follows:
“8. Consultation about major workplace change
8.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:
(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and
(b) discuss with affected employees and their representatives (if any):
(i) the introduction of the changes; and
(ii) their likely effect on employees; and
(iii) measures to avoid or reduce the adverse effects of the changes on employees; and
(c) commence discussions as soon as practicable after a definite decision has been made.
8.2 For the purposes of the discussion under clause 8.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
(a) their nature; and
(b) their expected effect on employees; and
(c) any other matters likely to affect employees.
8.3 Clause 8.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.
8.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 8.1(b).
8.5 In clause 8:
significant effects, on employees, includes any of the following:
(a) termination of employment; or
(b) major changes in the composition, operation or size of the employer’s workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(d) loss of, or reduction in, job tenure; or
(e) alteration of hours of work; or
(f) the need for employees to be retrained or transferred to other work or locations; or.
(g) job restructuring.
8.6 Where this award makes provision for alteration of any of the matters defined at clause 8.5, such alteration is taken not to have significant effect.”
[96] To satisfy s.389(1)(b), I must consider whether Bickford’s has complied with this consultation obligation in relation to Mr Lange’s redundancy.
[97] Clause 8 is a standard provision found in most modern awards. Its origins and intent were explained, in part, by the Full Bench in Consultation Clause in Modern Awards 22 as follows:
“[30] The word ‘consult’ means more than the mere exchange of information. As Young J said in Dixon v Roy:
“The word ‘consult’ means more than one party telling another party what it is that he or she is going to do. The word involves at the very least the giving of information by one party, the response to that information by the other party, and the consideration by the first party of that response.” [citations omitted]
[31] The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality. Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):
“... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.
To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that?”. Only in the latter case is there “consultation.”
[32] We respectfully adopt his Honour’s observations. Similar to the obligation to accord a person procedural fairness, the precise content of an obligation to consult will depend on the context. The extent and significance of a proposed change, in terms of its impact on the affected employees, will have a bearing on the extent of the opportunity to be provided. Hence a change of limited duration to meet unexpected circumstances may mean that the opportunity for affected employees to express their views may be more limited than would be the case in circumstances where the proposed change is significant and permanent. It is also relevant to note that while the right to be consulted is a substantive right, it does not confer a power of veto. Consultation does not amount to joint decision making.
[33] Some of the ordinary incidents of a requirement to consult are reflected in s.145A(2), that is:
• to provide information about the change; and
• to provide an opportunity for affected employees to give their views about the impact of the change; and
• to consider any views about the impact of the change that are given by the employees.” [Citations omitted]
[98] The duty to consult under clause 8 is in relation to major changes, including to the organisation and structure of the workplace, that is likely to have significant effects on employees as defined in subclause 8.5. There can be little doubt that the review of the senior leadership structure of the Winery was a major change that was likely to have significant effects, at least upon those holding the existing senior roles under consideration. As a result, clause 8 required that Bickford’s: 23
• Give notice, in writing, to all employees who may be affected after it has made a definite decision to make the relevant major change.
• Provide in the written notice all relevant information about the changes including their nature, their expected effect on employees; and any other matters likely to affect employees.
• Commence discussions with the relevant employees as soon as practical after the definite decision has been made.
• Discuss the introduction of the changes, their likely effect on employees, and measures to avoid or reduce the adverse effects of the changes on employees through a process that provides the affected employees with a genuine opportunity to advance their perspectives.
• Promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 8.1(b).
[99] The definite decision, to make the two winemaker positions redundant and to establish the new Winery Manager role, was described as being an “in-principle” decision. The evidence reveals that this meant the decision was to be implemented subject to any different outcome being made after consultation with the two Winemakers concerned. That decision was made some time immediately after 10 September 2019.
[100] I can appreciate that Mr Lange was disappointed that he was not consulted prior to or by the Review Group about operational issues, particularly given his role as Winemaker at the Winery concerned. However, the relevant consultation obligations required that Bickford’s must, as soon as practical after a definite decision has been made, commence the consultation discussions. I am satisfied that Bickford’s did so in this case.
[101] I can also appreciate that Mr Lange was deeply disappointed that Bickford’s had a preference to appoint Mr Fenton-Smith to the new role and that this was communicated at the outset of the consultation discussions. It may also have been better practice to have openly considered applications from the two Winemakers. However, given the notice requirements of clause 8.1 and 8.2 include the expected effect of the proposed changes upon him as an employee involved, and the fact that what was announced was a preferred position, to provide this indication was not inconsistent with the consultation obligations concerned.
[102] I have carefully considered whether the timing and manner of expressing the preference for Mr Fenton-Smith indicated that this outcome had already been determined and communicated to Mr Fenton-Smith (and Mr Lange) on that basis. The evidence of Mr Dix, which I accept, was that the in-principle decision was open to review as part of the consultation and Mr Lange’s position that he should be given the Winery Manager’s job was further considered prior to the final decision. As he testified, it was a difficult decision and the issue was further considered by Bickford’s after the 19 September meeting. This involved consideration of Mr Lange for the role, but ultimately, based on behaviours, skillset, approach to work and meeting deadlines, as opposed to the other candidate (Mr Fenton-Smith) “who was quite strong in those areas”, the Applicant “was not selected”. 24
[103] Mr Lange did not propose alternative approaches to address the issues stated as leading to the restructure, beyond the decision about who would occupy the new role. However, Mr Lange did raise issues about the impact of the reduction in overall winemaker resources. This was considered by Mr Dix and others who retained an alternative view about that issue. Bickford’s also did not change its view about the other aspects of the actual restructure and did not concede the fundamental rationale for the proposed restructure despite Mr Lange’s strong advocacy against the concepts and presumptions made. However, the weight of evidence supports the notion that the Respondent did genuinely consider Mr Lange’s perspective and informed him about the basis for rejecting that view.
[104] It is also clear to me that the correspondence to Mr Lange dated 17 September 2019 met the written notice requirements of clause 8.2. Mr Lange, in effect, contended that the fact that written notice was not provided to Mr Fenton-Smith meant that Bickford’s had not complied with clause 8 of the relevant modern award and that this was also an indication that the consultation was not genuine.
[105] I have already dealt with the latter aspect and I further observe that it was logical to first approach Mr Fenton-Smith about the proposal given Bickford’s stated preference for the new role. However, the provision of written notice is a requirement of clause 8.2. It would seem to me that if Mr Fenton-Smith had been made redundant and Bickford’s attempted to rely upon the genuine redundancy objection to defend his unfair dismissal application, the absence of written notice would be fatal to that objection. 25 However, s.389 of the FW Act is concerned with a consultation obligation that applied to the employment of the applicant and a consideration as to whether the relevant person’s dismissal (Mr Lange) was a genuine redundancy. I consider that this means that the provision is concerned with whether the employer has complied with the relevant requirements as they apply to the applicant in an unfair dismissal case, rather than to other employees who are not dismissed and are not unfair dismissal applicants.
[106] For the reasons given, I am satisfied that Bickford’s has complied with the relevant modern award consultation provision concerning Mr Lange’s redundancy. This satisfies s.389(1)(b) of the FW Act.
6.3 Reasonable redeployment
[107] The precise test established by s.389(2) of the FW Act in this case is whether it would have been reasonable in all of the circumstances for the person, Mr Lange, to have been redeployed within the employer’s enterprise (Bickford’s) or the enterprise of an associated entity (the Bickford’s Group including Vok). A finding that it was reasonable would mean that there was not a genuine redundancy. For reasons outlined earlier, this involves consideration of all relevant circumstances at the time of the dismissal.
[108] Further, in making that assessment, the Commission must find on the balance of probabilities, that there was a job or a position or other work within the employer's enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must be an appropriate evidentiary basis for such a finding. 26 The job or jobs concerned must also be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or within a reasonable period of retraining.27
[109] It is appropriate to start with the available positions identified during the consultation process that Mr Lange expressed an interest in, either at that time or during the hearing of this matter. In so doing, I accept that the absence of interest being expressed at the time of the consultation may be relevant to whether it was a reasonable option at the relevant time. I also leave aside for the moment, consideration of Mr Lange’s preferred position of “redeployment” into the new Winery Manager’s role.
[110] Consistent with the FW Act and the authorities, the positions and other work options assessed in the context of the reasonable redeployment consideration include those with the Bickford’s Group generally and positions at a lower level than Mr Lange’s Winemaker role.
Analyst role with the Finance/Administration team
[111] Mr Lange expressed an interest in this role during the consultation process and supplied his Curriculum Vitae 28 (CV) in support of consideration for that position. According to the Role Description,29 the Analyst role reported directly to the Bickford’s Group Chief Financial Officer and involved a high-level role in supporting the pricing and forecasting models used within the organisation. The role also required the following key decision-making capacities:
“• Verifying pricing proposals put forward by sales and marketing teams, ensuring they meet predetermined parameters with respect to margins
• Backup support for Host Analytics forecasting tool, Including loading of data and running ad-hoc reports
• Effective Interpretation and analysis of monthly pricing, trade spend and marketing spend
• Manage and recommend periodic pricing updates
• Effective prioritisation of work load to meet competing demands.” 30
[112] The Analyst role also contemplated various key accountabilities including the preparation of sales and pricing forecasts using the “HOST” planning tool, financial analysis of pricing, sales and marketing activities, management reporting and the maintenance of financial information. The role required qualifications in the nature of a Bachelor Degree in Commerce, Finance, Business or other relevant discipline and experience with:
“• Exposure to relevant business Intelligence tools, systems and software
• Knowledge of QAD, Host Analytics and/or Qlickview an advantage
• Understanding of management accounting requirements within a distribution environment
• Demonstrated experience analytical reviews and report preparation
• Commercial acumen.” 31
[113] I accept Mr Lange’s evidence that he did undertake some management studies during his Agricultural degree and had, as the Winemaker, worked with business analysists engaged within the Bickford’s Group. However, the nature of the Analyst role contemplated here required qualifications and experience with techniques, tools and systems associated with pricing and marketing analytics that were not within his previous roles and I do not consider that he could make the transition even with a period of reasonable retraining. The CV provided by Mr Lange in support of that position, would also not have reasonably led Bickford’s to the view that there was any relevant experience or capacities that it was not aware of as a result of his employment with them.
[114] In the circumstances I consider that it was reasonable for Bickford’s not to redeploy Mr Lange into the Analyst role.
Venue Manager at the 23rd Street on Melbourne bar venue
[115] Mr Lange did not express an interest in this role during the consultation process and did not seek further information at the time. Mr Lange also did not specially rely upon this position in his written submissions. There is little before the Commission about this role and I have treated it on face value. That is, the role was to act as a venue manager for a licenced bar. Although Mr Lange may have had some experience with hospitality as part of his earlier wine industry career, he did not identify this to Bickford’s and there is no indication that this involved relevant bar management experience. Mr Lange’s position during the hearing, that he was, or may be, interested in the role was not convincing and this was consistent with the absence of any expression of interest at the time that the position was identified by Bickford’s as being a possible redeployment option.
[116] In the circumstances I consider that it was reasonable for Bickford’s not to redeploy Mr Lange into the Venue Manager’s role.
[117] I turn now to the other redeployment options now relied upon by Mr Lange.
Distillery Production Manager
[118] This job was not identified by Bickford’s to Mr Lange during the consultation phase. Ms Sindely became aware of the job when Bickford’s advertised for the position some two weeks after Mr Lange’s dismissal.
[119] The evidence before the Commission is that the position was first advertised on 8 October 2019. The role became available due to the retirement of the current Distillery Production Manager who was set to retire in June 2020. Although this pending retirement was known to Bickford’s at the time of Applicant’s redundancy, no decision had been taken about how and when this role would be filled. The evidence is also that the personal circumstances of the individual involved changed leading to the need to advertise the position at short notice.
[120] The role of Distillery Production Manager is a site management role located in Queensland and I accept for present purposes that Mr Lange would have considered moving his residence to undertake other roles within the Bickford’s Group. The role oversees all responsibilities regarding the distilling operations, compliance, budgetary requirements, staff management, maintenance, liaising with sale/marketing teams and support to the Visitor Centre.
[121] Although Mr Lange has no distillery experience, I accept that his Oenology qualification would be relevant in a general sense. I also accept that Bickford’s had sounded him out at some stage prior to the events leading to the redundancy about his willingness to work at a distillery operation in the Riverland of South Australia. However, that opportunity was not taken up and would have involved working under the leadership of a Master Distiller, a role similar to that contemplated in the Queensland Production Manager role.
[122] Given the nature of the context in which the Distillery Production Manager role would operate, I accept that the Applicant’s lack of any actual Master Distiller experience would have been a genuine limitation on his capacity to reasonably move into that role. That is, given the size and self-contained nature of the workgroup concerned, there would have been limited capacity for Mr Lange to transition into the role without on-site distillery experience. Further, I am also, on balance, satisfied that the position was not available at the relevant time, being the point at which the dismissal occurred.
[123] In the circumstances I consider that it was reasonable for Bickford’s not to redeploy Mr Lange into the Distillery Production Manager role.
Actions taken by Bickford’s in relation to redeployment
[124] To the extent that the authorities 32 contemplate a broader review of the actions taken by the employer to investigate and explore redeployment opportunities, I have also considered that aspect. I accept Mr Lange’s perspective that the indication given by Ms Mahar in the first consultation meeting that there were no apparent redeployment options may have been premature. However, despite indicating this view, Bickford’s provided a full list of all available vacancies within the Bickford’s Group, including positions likely to be at lower remuneration levels, and invited Mr Lange to express any interest. Having expressed interest only33 in the Analyst role, Mr Lange was provided with the relevant Role Description, invited to provide information to support his interest, Bickford’s considered his qualifications and experience, and for reasons set out earlier, made a reasonable decision not to provide that role to Mr Lange. I also find that Bickford’s considered the extent to which Mr Lange had transferrable skills in light of the interest that he did show in the Analyst position. These, and the other steps canvassed above, support the proposition that Bickford’s has established that s.389(2) will not operate in this case to prevent a finding of genuine redundancy.
Winery Manager
[125] This leaves consideration of the Winery Manager role as a potential redeployment option for present purposes.
[126] It is evident that during the consultation process leading to the redundancy, Mr Lange sought in effect to be given the new Winery Manager job. Although not articulated by him in written submissions as a reasonable redeployment option for the purposes of s.389(2) of the FW Act, at the outset of the hearing I put the Respondent on notice that this may be considered by the Commission. I have proceeded on the presumption that this is a potential circumstance contemplated by s.389(2), given the facts of this matter.
[127] In this case two jobs were made redundant and Bickford’s had to choose between the two existing Winemakers if it was to utilise either of them in the new role. Bickford’s made that assessment, noting that for each of the Winemakers, the new job obliged them to undertake a wider management role than previously required. Bickford’s made that assessment based on its understanding of each person’s aptitude and potential to grow into that role. It may be suggested that at the time of the redundancy of Mr Lange being implemented, i.e. his actual dismissal, a final decision had been made that the Winery Manager’s role was to be given to Mr Fenton-Smith. In that sense it was not a position available to Mr Lange at the relevant time as a result of the decision made by Bickford’s as to which Winemaker would be given the new role and the decision to make Mr Lange redundant.
[128] However, the reality is that two decisions were made by Bickford’s. Firstly, to make Mr Lange redundant. Secondly, not to redeploy Mr Lange into the Winery Manager position given its preference for the other Winemaker. Accordingly, although the authorities make it clear that the selection of the applicant for the redundancy is not a relevant consideration in terms of whether the dismissal was a genuine redundancy, this does not address the question of redeployment. That is, in this case, would it have been reasonable in all of the circumstances to redeploy Mr Lange including potentially into the Winery Manager position? The fact that Bickford’s did not do so cannot, of itself, determine that question.
[129] In approaching this aspect, I accept that it would not seem to be consistent with the consideration of the genuine redundancy objection as a statutory preliminary jurisdictional point for the Commission to, in effect, determine the fairness of the Applicant’s dismissal as an integral part of deciding the issues flowing from s.385(d) of the FW Act. However, the more limited consideration set out above does not require the Commission to do so.
[130] The evidence is that Bickford’s made an objective assessment of the two Winemakers and determined that Mr Fenton-Smith was more capable of making the transition to the new broader management role. Although the direct evidence about Mr Fenton-Smith is somewhat limited, the evidence of Mr Dix and Ms Mahar, which I accept, is that his capacity to work as part of the broader management team and his aptitude for the new role was stronger than Mr Lange’s. I also observe that the fact that Mr Lange did not discern the difference between his role and that of the proposed Winery Manager was perhaps indicative of this aspect. Further, the Winery Manager role was also significantly different from the Winemaker’s role such that a decision about which of the two Winemakers could more readily and effectively undertake that role was reasonably required. In that regard, the fact that the new role was a very senior management position, requiring the manager to take initiative, accept broad responsibility for the Winery, and work closely with the group managers including Mr Dix, is relevant to the assessment of the reasonable actions of Bickford’s in determining who would be redeployed.
[131] In considering this aspect I have also had regard to the fact that the redeployment option was reviewed after the in-principle decision was announced, including consideration of the Applicant’s response and advocacy about the proposed changes, and the competing strengths of each Winemaker.
[132] Given the decision to engage Mr Fenton-Smith in the new role and having regard to all of the circumstances of this matter at the time of the Applicant’s dismissal, I am on balance persuaded that it was reasonable for Bickford’s not to put Mr Lange into the Winery Manager job as a relevant redeployment option.
[133] As a result, and having regard to the earlier findings on this aspect, on balance I find that it would not have been reasonable in all of the circumstances for Mr Lange to have been redeployed within the employer’s enterprise or the enterprise of an associated entity. This means that Bickford’s has demonstrated that s.389(2) of the FW Act does not operate in this case to mean that Mr Lange’s dismissal was not a case of genuine redundancy.
7. Conclusions
[134] Given the above findings, I am satisfied that Mr Lange’s dismissal was a case of genuine redundancy within the meaning of s.389 of the FW Act. As a result, under s.385, a finding that he was unfairly dismissed is not available and there is no jurisdiction for the Commission to make that assessment.
[135] The unfair dismissal application itself must be dismissed and an Order 34 to that end is being issued in conjunction with this Decision.
COMMISSIONER
Appearances:
H Lange, the Applicant on his own behalf with A Sindely.
G Walker, of counsel, with permission for Bickford’s Australia Pty Ltd.
Hearing details:
2020
Adelaide
6, 7 February.
Printed by authority of the Commonwealth Government Printer
<PR716452>
1 Section 396(d) of the FW Act.
2 The Wine Industry Award 2010 does not contain management classifications and the Miscellaneous Award 2010 expressly excludes “employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees … “ (clause 4.2).
3 Under s.596 of the FW Act. The request was not opposed, and reasons for permission were provided separately to the parties.
4 Applicant’s written submissions.
5 Document D attached to exhibit A1.
6 Annual Performance Appraisal 2018 – document E to exhibit A1.
7 Ms Mahar’s oral evidence.
8 Mr Dix’s oral evidence.
9 Document DJDM 1 attached to exhibit R1.
10 Drawn from the Role Description that in in my view remained accurate on this scope.
11 Based upon the Role Description for the Winery Manager role – document DJDM2 attached to exhibit R1 subsequently provided to the Applicant - and the witness evidence about the intended role.
12 Document DJDM 4 attached to exhibit R1.
13 Document DJDM 5 attached to exhibit R1.
14 Role Description DJDM 5 attached to exhibit R1.
15 Document A attached to exhibit A1.
16 See Teterin and others v Resource pacific Pty Limited t/a Ravensworth Underground Mine[2014] FWCFB 4125 at [27] to [29] and [32].
17 (2010) 196 IR 32.
18 Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.
19 Ulan Coal Mines Ltd v Honeysett and Murray v Ulan Coal Mines Ltd (2010) 199 IR 363.
20 Technical and Further Education Commission T/A TAFE NSW v L. Pykett[2014] FWCFB 714.
21 See also Dibb v Commissioner of Taxation [2004] FCAFC 126.
22 [2013] FWCFB 10165.
23 There is no suggestion that in this case the employees concerned had representatives (potentially relevant to clauses 8.1 and 8.2) or that Bickford’s relied upon the exclusion of confidential information outlined in clause 8.3.
24 Arbitration Hearing 6 February 2020 at 14:06
25 UES (International Pty Ltd v Harvey[2012] FWAFB 5241.
26 Technical and Further Education Commission T/A TAFE NSW v Pykett[2014] FWCFB 714 at para [36].
27 Ibid and Ulan Coal Mines Limited v Honeysett[2010] FWAFB 7578 at para [34].
28 Document DJDM 6 attached to exhibit R1.
29 Document DJDM 3 attached to exhibit R1.
30 Document DJDM 3 attached to exhibit R1.
31 Document DJDM 3 attached to exhibit R1.
32 Technical and Further Education Commission T/A TAFE NSW v Pykett[2014] FWCFB 714 at para [37].
33 From the list of available jobs provided to him at that time.
34 PR716867.
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