J Marshall v UBS AG Australia Branch T/A UBS

[2012] FWA 1708

Note: An appeal pursuant to s.604 (C2012/3655) was lodged against this decision - refer to Full Bench decision dated 13 August 2012 [[2012] FWAFB 6852] for result of appeal.

[2012] FWA 1708

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

J Marshall
v
UBS AG Australia Branch T/A UBS
(U2011/12309)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 13 APRIL 2012

Genuine redundancy - worldwide program of redundancies at UBS because of world financial downturn - Australian operations affected - did a modern award apply - Client Advisor - was consultation clause in modern award complied with - was it reasonable to redeploy Mr. Marshall

[1] On 5 October 2011, Mr. Justin Marshall made an application for an unfair dismissal remedy with respect to his dismissal on 21 September 2011. On 26 October 2011, UBS responded to the application by claiming that the termination of employment was a genuine redundancy within the Act, and that therefore the termination of employment was not an unfair dismissal.

[2] Conciliation was unsuccessful. The matter was listed for jurisdiction hearing and arbitration before me.

Decision

[3] It is agreed that Mr. Marshall is a person protected from unfair dismissal by s.382 of the Fair Work Act 2009 (the Act) by virtue of his earnings, and s.382(b)(iii) 1.

[4] UBS submits that the termination of Mr. Marshall’s employment was a genuine redundancy within s.389 of the Act, which provides:

“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.”

Section 389(1)(a) - The 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

[5] The phrase in s.389(1)(a), that the employer no longer requires the person’s job to be performed by anyone, has a long history in Australian industrial law. It was used in R v. Industrial Commission of South Australia 2in 1977, and the Termination, Change and Redundancy Cases of 19843. The phrase was included in federal awards as a result of those last decisions. It remained in awards until the term was removed during the award simplification proceedings in 1997 as not allowable4. In 2009 the term was given statutory effect in the provisions of s.389(1)(a)5. It was combined with terminology drawn from ILO Convention 158 - Termination of Employment, namely that the termination be the result of changes in the ‘operational requirements’ of the employer’s enterprise, and the reference to ‘genuine operational requirements’ in 2006 legislation. The section appears to be a compendium of industrial tribunal decisions, an international convention, and recent legislative history.

[6] Between 1996 and 2006, redundancy matters were considered under the general harsh, unjust or unreasonable termination provisions. Redundancies were considered under the general question of whether or not the termination was for a reason related to the operational requirements of the employer’s business and defensible on those grounds as a valid reason 6. In 2006 dismissal for ‘genuine operational reasons’ was a specific statutory exemption from the general right to apply for relief in respect of termination of employment7. The terminology of ‘operational requirements’ was taken from Article 4 of ILO Convention 158 - Termination of Employment, which was also a schedule to the Act and referred to in the objects of the termination of employment part of the Act8. The Convention is no longer a schedule, nor is it referred to in the objects of the termination of employment part of the Act9. Nevertheless it continues to be a requirement of the test in s.389(1)(a) that the termination be a result of changes in the ‘operational requirements’ of the employer’s enterprise, and that the redundancy be ‘genuine’.

[7] In Ulan v. Howarth 10a Full Bench of this tribunal quoted the Explanatory Memorandum to the Fair Work Bill in the following terms, in considering the requirements of s.389(1)(a):

“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.”

[8] The Bench also said:

“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).’”

[9] UBS submits that it no longer required Mr. Marshall’s ‘job to be performed by anyone’ within s.389(1)(a). It submits that ‘as a consequence of the cost-cutting drive and requirements for a 3,500 global headcount reduction, there was a change in the operational requirements of UBS’s business which resulted in UBS’s decision that it no longer required Mr. Marshall’s job to be performed by anyone.’

[10] It said that the two dot points in the Explanatory Memorandum quoted above apply, namely that the business was experiencing a downturn and a lesser number of employees was needed, and that the tasks done by the particular employee are distributed between other employees. It submits that ‘Mr. Marshall’s duties were divided up between and undertaken by the remaining Client Advisors in the Melbourne office of UBS’, and that ‘redistributing functions in this way constitutes a genuine redundancy within the meaning of s.389(1)(a)’.

[11] It says that the three new Client Advisors subsequently engaged by UBS have not undertaken any of Mr. Marshall’s former duties. These three new Client Advisors ‘are each hoped to bring to UBS their own previously developed client bases and they each are considered to have greater revenue generating potential than Mr. Marshall .... UBS did not advertise for new Client Advisors .... The fact that UBS was fortunate to have the opportunity to increase its net profitability by engaging three experienced Client Advisors with their own existing extensive client base following the termination of Mr. Marshall’s employment does not have any bearing on the fact that Mr. Marshall’s employment was terminated because of global changes in the operational requirements of the UBS enterprise (ie. cost cutting)’  11.

[12] Mr. Marshall submits that the requirements of s.389(1)(a) were not met. UBS was continuing to recruit employees for client advisory positions throughout the period before and after the termination of his employment 12.

[13] Mr. Williams, the Chief of Staff of the Australian Wealth Management business gave evidence that in August, UBS established ‘Project Sapphire’ under which it would ‘be reducing its global headcount by 3,500 across all of its businesses.’ On or about 23 August 2011, Mr. Graham Francis, the regional head of Wealth Management for Australia, informed Wealth Management in Australia that it was required to identify a number of positions across the Melbourne, Brisbane and Sydney offices to be made redundant. On 29 August 2011, Mr. Williams participated in a conference call regarding the Project Sapphire redundancies for Wealth Management in Australia, together with four other people. A number of criteria for identifying Client Advisors for potential redundancy were identified, which could be said to relate to performance and wealth generation for UBS, as well as other factors such as team based approaches to work, and cultural alignment with UBS.

[14] There was ‘preparation and co-ordination for 18 potential redundancies over three offices’. Mr. Marshall and another person were identified as ‘candidates for potential redundancy’ in Melbourne 13.

[15] Ms. Rodas, Human Resources Assistant, gave evidence that on 30 August 2011 she was asked by Mr. Williams to prepare redundancy calculations for a number of employees whose positions had been identified as potential redundancies. Mr. Marshall was one of the roles identified for potential redundancy by Mr. Williams. She advised that she and David Campbell, Melbourne Market Manager, met with Mr. Marshall on 12 September 2011 to advise him that UBS had identified his position for possible redundancy. She gave Mr. Marshall a letter regarding his potential redundancy, and a vacancy report list. She had a further conversation with Mr. Marshall on 14 September 2011, and then on 21 September 2011 14.

[16] Mr. Marshall also gave evidence that he had been praised for his performance, including by his desk head Pep Perry, and when he heard rumours about redundancies about how his desk head told him that his position was safe. After the 12 September 2011 meeting, Mr. Marshall was removed from a client advisor meeting in a humiliating fashion, and on 13 September Mr. Marshall asked Mr. Campbell to reconsider the decision. He was told that no decision had been made and that he should not be in the office. On 13 September 2011 Mr. Marshall commenced sick leave following receipt of a medical certificate. His desk head told him on 3 October 2011 that he still wanted him employed at UBS and would discuss the issue with management and attempt to have him reinstated.

[17] Firstly, on the material before me, UBS announced on 24 August 2011 that it had decided to implement a worldwide scheme to reduce employment by 3,500. Mr.Graham Francis, the Chief Executive of Wealth Management Australia, sent an email on 23 August 2011 advising various employees that he had been asked to compile the names of ‘our ‘exit cases’ for submission by next Monday’. He asked for a preliminary list of names by Friday noon latest. Both documents associated the reduction in employment with the difficult state of the international economy and markets. It is notable that the email from Graham Francis states that ‘it would be possible to make substitutions or offer alternative cost savings’ 15. This project of employee reductions was given the name Project Sapphire.

[18] Secondly, on the evidence of Mr. Williams, 18 employees were to be made redundant in the Australian wealth management business, including Mr. Marshall and one other from the Melbourne office.

[19] Thirdly, the criteria used for selecting employees for redundancy were various assessments of performance and contribution to the business, including future contribution to the business, appropriate to a business of this kind. While Mr. Marshall’s manager Mr. Pep Perry may have supported the continuing employment of Mr. Marshall, it was clearly the decision of UBS that Mr. Marshall be made redundant, and it was open to them to it through the managers with authority to make that decision. Mr. Perry apparently made his views known and they were not accepted. That does not alter the fact that there was a genuine redundancy. What happened was that the job occupied by Mr. Marshall came to an end and his ‘business’, namely his clients, were distributed to other Client Advisors.

[20] Fourthly, in addition three new Client Advisors were employed in Melbourne shortly afterwards at additional cost. There was therefore a net one additional person employed in the Melbourne wealth management business notwithstanding Project Sapphire, and additional monetary costs were incurred in the form of ongoing commencement payments of varying amounts.

[21] Counsel for UBS submitted that the employment of new Client Advisors ‘was akin to acquiring a new business. This is not a situation where you have five boilermakers in a factory, you get rid of two and put on three new boilermakers doing exactly the same work. This is a situation where UBS has effectively acquired the business of these three Client Advisors whose clients come across with them and generate revenue for those Client Advisors and for UBS. ... This is a case where UBS has in effect acquired the businesses of these three client advisors. That’s why it’s not a situation of saying two on, ... three on.’ 16 He also submitted that, as Mr. Williams and Ms. Rodas said in evidence, the fact that duty statements are the same in any position in the organisation has no bearing. The duty statements are not a description of the actual functions and responsibilities of an employee17. If they were then all employees would in effect perform the same functions and have the same responsibilities.

[22] Counsel for Mr. Marshall submitted that the purported redundancy was not genuine, because UBS was continuing to recruit employees for Client Advisory positions throughout the period before and after the termination of Mr. Marshall’s employment 18. He submitted that there was no difference between the three new Client Advisors and Mr. Marshall, and that two of the new Client Advisors were actually required to earn less money than Mr. Marshall. He said that there was no change in the duties and responsibilities19.

[23] Firstly, notwithstanding the employment of new Client Advisors, it is still the case that because of the difficult international economic environment and markets, and the effect of that on UBS as a business, UBS began a process of reducing employment by 3,500 worldwide. It is still the case that the wealth management business in which Mr. Marshall worked was also subject to that process. I accept that the ‘operational requirements of the employer’s enterprise’ were such that redundancies were required.

[24] Secondly, Mr. Marshall’s clients, his business or function, were distributed to other Client Advisors. The business serviced the same number of clients with a lesser number of employees.

[25] Thirdly, it is well accepted that an employer may undertake a process of implementing redundancies while still conducting and developing a business by, for example, employing new employees in other jobs. However, this must not be inconsistent with the requirement of a genuine redundancy that the ‘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’. It is a question of fact as to the nature of the new jobs and the job which is claimed to be redundant. There are examples of both matters where the job was sufficiently different on the evidence 20, and cases where the jobs were not sufficiently different21.

[26] Can the new jobs which are established, each being a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee, be accurately described on the evidence as different jobs, rather than the job that the terminated employee was performing? Nor is it sufficient to simply look at the title of the new jobs, for example ‘Client Advisor’. If that was sufficient, then the title could be simply changed.

[27] What is the evidence in this case about the new jobs established by UBS in Melbourne wealth creation? Mr. Williams gave evidence about the employment of these additional Client Advisors to the effect that for example the three new Client Advisors brought a type of business to wealth management in Melbourne that they were ‘keen to grow’:

“In terms of servicing particular clients, the duties and the activities that client advisers will perform will differ. We’ve - are meeting particular needs for particular clients and they all have different products, they all have different services that they all demand. So in terms of the way that we service those accounts, it will be different across the client book, and the client advisers will have a different mix of clients, different segments and different ways of servicing those accounts. So it is very different.

In terms of comparing the clients and the type of revenue that the three new client advisers have generated and are generating for UBS, can you compare that to Mr. Marshall? - Justin’s client book I believe was more based on recurring fees ...

Explain to his Honour what you mean by recurring fees? - Recurring fees would be - the way that we earn our revenue from those clients would be charging an assets under management fee essentially on the portfolio. That is generally the majority of our revenue base. The three new client advisors bring a different activity in terms of they are more transactional in nature, which is an area that the business is keen to grow as well.

What are transactional fees? - Transactional fees would be where we have ongoing turnover and not necessarily charging assets under management fee, but it would be per trade per deal that we-re charging a fee for. The biggest revenue writer that we’ve brought in out of the three certainly has a different client base compared to what we have for the vast majority of client advisors and also Justin [Marshall].” 22

[28] On his evidence the title of the jobs was the same but there was a high degree of difference between the business of Mr. Marshall and those of the new employees, which he summarised as ‘a different mix of clients, different segments and different ways of servicing those accounts’. It would, in other words, not be a case of comparing apples with apples. Mr. Williams gave evidence that the new employees brought with them not so much earnings by way of ‘recurring fees’ which was more Mr. Marshall’s ‘client book’, but ‘transactional fees where we have ongoing turnover and not necessary charging assets under management fee’, but ‘trade per deal that we’re charging a fee for’, and other differences. The reply of the applicant was that Mr. Marshall as a specialist financial advisor to his clients based on his qualifications and experience, was ‘no different to the three client advisors that have been engaged by the company’ 23.

[29] However, the evidence of Mr. Williams, which I accept, indicates that this was not the case. The evidence is that a number of Client Advisor jobs were eliminated from the Wealth Management business in Melbourne, Australia, and throughout the world, as part of a genuine process of redundancy. Two new Client Advisors were employed in Melbourne in jobs which had the same title but whose content differed substantially from the jobs which were eliminated, to the extent that the new jobs constituted adding additional businesses. The new Client Advisor positions did not affect the nature of the genuine redundancy.

[30] Overall, it is not inconsistent with the nature of a redundancy for existing business customers to be serviced with a smaller team, retaining the customer income but reducing costs, and for this to be combined with bringing in a new type of business by way of new employees who bring this new business with them. A process of redundancies does not preclude bringing in a new area of business with the potential to grow, or similar restructuring or reorientation of the business, while eliminating a job which is no longer needed and is no longer to be done by anyone because of the operational requirements of the business to reduce costs of servicing existing customers. It was not to the point that the formal contract of employment at UBS was the same, as it was for nearly all employees regardless of function.

[31] On the material before me, Mr. Marshall was subject to a process of genuine redundancy. I am satisfied that the requirements of s.389(1)(a) are satisfied.

Section 389(1)(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

[32] Two issues arise in relation to s.389(1)(b): did a modern award apply to Mr. Marshall’s employment? If one did, did the employer comply with obligations to consult about the redundancy set out in the award? Naturally the parties are in fierce dispute about each of these questions. Section 47 of the Act provides:

‘47 When a modern award applies to an employer, employee, organisation or outworker entity

When a modern award applies to an employee, employer, organisation or outworker entity

(1) A modern award applies to an employee, employer, organisation or outworker entity if:

(a) the modern award covers the employee, employer, organisation or outworker entity; and

(b) the modern award is in operation; and

(c) no other provision of this Act provides, or has the effect, that the modern award does not apply to the employee, employer, organisation or outworker entity.

Note 1: Section 57 provides that a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment.

Note 2: In a modern award, coverage of an outworker entity must be expressed to relate only to outworker terms: see subsection 143(4).

Modern awards do not apply to high income employees

(2) However, a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) at a time when the employee is a high income employee.

Modern awards apply to employees in relation to particular employment

(3) A reference in this Act to a modern award applying to an employee is a reference to the award applying to the employee in relation to particular employment.

48 When a modern award covers an employer, employee, organisation or outworker entity

When a modern award covers an employee, employer, organisation or outworker entity

(1) A modern award covers an employee, employer, organisation or outworker entity if the award is expressed to cover the employee, employer, organisation or outworker entity.

Note: In a modern award, coverage of an outworker entity must be expressed to relate only to outworker terms: see subsection 143(4).’

Did a modern award apply to Mr. Marshall’s position as Client Advisor?

[33] It is firstly agreed that UBS falls within the coverage clause, clause 4, of the Banking, Finance and Insurance Award 2010 (‘the award’).

[34] Secondly, the applicant contends that Mr. Marshall’s position as Client Advisor falls within either B.6 Level 6, or B.5 Level 5 of the award 24. UBS contends that a Client Advisor position falls within neither and that the Client Advisor job is traditionally not regulated by awards.

[35] The award was handed down by the Award Modernisation Full Bench of the Australian Industrial Relations Commission (‘the Commission’) as one of the awards made during Stage 2. 25 The Bench said:

“We have added superannuation and agribusiness to the definition of the banking, finance and insurance industry to ensure that the coverage of the award is comprehensive for the financial services sector.” 26

[36] However, coverage is not the same thing as application (see ss.46-47 of the Act). Comprehensive coverage does not necessarily assist at all in relation to the application of the award. UBS submits that this is traditionally an award free area. However, it is not clear that this is the case for reasons discussed below.

[37] Turning to deal with the terms of the award itself, Levels 5-6 of the award provide:

“B.5 Level 5

A Level 5 position is one in which tasks, service requirements and supervisory functions are performed using a more extensive range of skills and knowledge at a higher level than required at Level 4.

The position may be:

(a) a specialised role, possibly supported by one or two junior staff members, requiring formal qualifications and/or specialised vocational training; and/or

(b) a managerial role (managing 5–10 people) responsible for the operation of part or parts of the employer’s business.

Those employed at this level exercise considerable discretion and/or are responsible for operational planning.

Indicative job list—human resources consultant, senior learning and development officer, accountant, senior claims officer, analyst programmer, fraud investigator, call centre team leader, credit controller, administration manager, underwriter, sales manager, customer service team leader, assessor, loss control officer, business analyst, assistant branch manager, personal lending specialist, team leader.

B.6 Level 6

Those employed at this level perform a middle managerial role primarily to control the conduct of a part of the employer’s business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level.

Indicative job list—branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager.”

[38] In Hamilton James and Bruce Pty Limited v Michelle Gray 27a Full Bench of this tribunal said that:

“[27]In our view, a proper reading of his Honour’s decision indicates the Senior Deputy President regarded Layton’s case as establishing that he should use a principal purpose or primary function test to determine whether Ms Gray’s position was covered by the Clerks Award 2010 and used that test in deciding whether Ms Gray was covered by the Clerks Award 2010. His Honour did not rely on the coverage of the NAPSA or the facts in Layton’s case to conclude Ms Gray was not covered by the Clerks Award 2010.

[28]We are not persuaded his Honour made an appealable error in the regard he had to Layton’s case.”

[39] Mr. Williams gave evidence that:

“Client Advisors are the employees in the Wealth Management business who deal directly with clients. Typically, a UBS Wealth Management client will have a Client Advisor assigned to them and will conduct all their dealing with that Client Advisor.

Client Advisors are considered designated representatives of UBS for Australian financial services licensing purposes. As such, Client Advisors need to comply with the Australian Securities and Investment Commission’s Regulatory Guide 146.

It is not accurate to describe Client Advisors as financial planners. Financial planners take a more holistic approach in advising a client about the client’s complete financial position. While a Client Advisor will have regard to a client’s personal financial and other circumstances, Client Advisors essentially only assist and advise clients in relation to investment strategies to maintain and grow the financial assets of clients.” 28

[40] He said that there is a difference between financial planners and Client Advisors and that the financial planning team are generally set up differently to Client Advisors 29. He said during cross examination that one could not simply look to the letters of offer for Client Advisor positions, and that:

“In practice some may have very different skills and would service very different clients.” 30

[41] Mr. Williams gave evidence that he was not in the financial planning team, that financial planners are licensed differently to Client Advisors, that financial planners do not execute trades but Client Advisors do, that Mr. Marshall was not licensed to provide advice on superannuation matters 31. His counsel agreed that he was not a financial planner32.

[42] Mr. Marshall gave the following evidence about his duties as a Client Adviser:

“Aside from those, can you tell his Honour - aside from those duties listed there, can you tell his Honour what you did as a client adviser?---I can. As a client adviser at UBS, my day would start before 8.30. At 8.30 we’d have a morning meeting with research staff where a morning call from the institutional desk would be replayed to us. That would be analysts that had written research reports previous days and talked about that day. Now, the meeting was for us to analyse those reports and disseminate that information to use as we saw fit to give to our clients and pass on - and make investment recommendations on the basis of that. So following that I would return to my desk, make judgments on that research on the daily press, analyse announcements that come out about companies through the ASX and other forms that were given to me. I’d analyse those reports and make decisions upon that and relay that to my clients that I thought it was necessary to do. I’d also prepare financial reports for my clients from time to time about what had happened previously in the last three, six or 12 months. I would meet with those clients, talk about the financial performance of their portfolios and their investments. I would also prepare plans, management plans and such for what I thought their investment requirements were over the next sort of five, 10, even 20 years, some of the people that I dealt with would require plans of that sort of length. I’d also meet with these clients as a relationship manager in that a relationship between a UBS client and UBS was through a client adviser. It was not through UBS. Nobody else in the organisation had that relationship with the client. It was solely my relationship. I would use UBS resources to build portfolios for clients and invest on their behalf. So the relationship with the client was really held with the client adviser, and that is really what my day was. I would talk to clients, consider what their financial circumstances were and then I’d give them advice on how I best thought they could reach their financial goals and implement that strategy.” 33

[43] In cross examination, Mr. Marshall gave the following evidence:

“MR SAUNDERS: Mr Marshall, you were employed by UBS in the position of associate director client adviser, weren’t you?---No.

Do you have a copy of your witness statement in front of you with the annexures to it, please?---Yes.

Could you please turn to the first annexure, which is annexure JM1 to your statement, please. This is your letter of offer dated 21 August 2008?---(indistinct)

Do you see the opening paragraph there says, “UBS is pleased to offer you the position of client adviser. Subject to informal approval, your corporate rank will be associate director.” Do you see that?---Yes.

You were appointed to the rank of associate director, weren’t you?---Yes. So my - - -

So your position was client adviser, rank associate director, correct?---Yes.

Now, in terms of the hierarchy within UBS, the hierarchy within wealth management was managing director, executive director beneath that, director beneath that, then associate director, then a whole host of employees beneath that. That’s right, isn’t it?---Yes.

You have a degree in banking and finance. That’s right?---Yes.

And more than 15 years’ experience in the wealth management industry, is that right?---Yes.

In your role as client adviser, rank associate director with UBS, you used your skills and experience and training you received at university and in your 15 years’ experience to undertake your role for UBS, didn’t you?---Yes.

In your role as a client adviser for UBS, you were not responsible for managing any other employees, were you?---I helped manage with Simon Davies, as I said before. He was an associate adviser who was a junior adviser that was put with me for me to impart my knowledge on him and help him grow his business.

It was effectively a coaching role to help him out. Is that right?---I don’t know the specific name for it, but it was a mentoring role.

He didn’t actually report to you, did he?---He didn’t report to me.

It’s fair to say that you didn’t manage him, isn’t it?---I’m not familiar with the term “manage”, but he was sitting with me he - I was to help him, give him guidance on things that he required guidance on.

You say that your direct supervisor was Pep Perry, don’t you? You don’t say that you were the direct supervisor of Simon Davies, do you?---No.

In the financial year ending 30 June 2011, your remuneration, your total remuneration you received from UBS, was about $207,000, wasn’t it? In the year prior to that, the financial year ending 30 June 2010, your total remuneration from UBS was about $170,000, wasn’t it?---Yes.

You gave evidence this morning about your usual day at work at UBS, and in that evidence you told his Honour that you would attend a meeting in the morning where analysts would present written research reports. That’s right, isn’t it?---Yes.

You didn’t ever prepare any written research reports, did you?---No.

The analysts did that, didn’t they?---They did.

The analysts sat in the investment bank at UBS rather than the wealth management business, correct?---Not all of them, no.

Then you said that your role was relaying the information that you received from the analysts to your clients, correct?---Yes.

Within the UBS wealth management business, there’s a wealth planning team, isn’t there?---Yes.

The people who work in the wealth planning team are financial planners, aren’t they?---Yes.

You weren’t in that team, were you?---No.

The financial planners are licensed differently from client advisers, aren’t they?

---Yes.

One of the differences between the two roles is that financial planners, for example, can advise in relation to superannuation, whereas the client adviser cannot. That’s right, isn’t it?---We advise on superannuation.

That doesn’t come within your regulatory rafts as a client adviser, to advise on superannuation does it?---It does. I operate on super funds.

That doesn’t mean you provide advice in relation to super funds, do you?

---I provide advice on the operation of super funds.

Is the advice that you say - - -?---I buy and sell shares, I buy and sell bonds for super funds.

So you say the advice you provide is financial advice as to what investments a super fund should make?---Yes.

Financial planners within the wealth planning team at UBS don’t execute trades, do they?---No.

You did, didn’t you?---Yes.

At the time your position was made redundant - when you commenced employment at Baillieu, Mr Marshall, do you recall completing a survey in relation to what you had been doing in the past 10 years?---Partly, yes.

I will show you the document but do you recall being asked about your ASIC regulatory accreditations?---Yes.

And in particular one of the questions you were asked about was whether you were authorised in terms of ASIC regulatory guides to provide advice on superannuation matters and you said, “No.” Do you agree with that?---I do.” 34

[44] On UBS’s submissions those who provide Client Advisers with technical financial advice and financial reports are within Level 6 as ‘senior analysts’, those who manage them may be ‘middle managers’ or ‘team leaders’, those who provide their human resources services are ‘human resources managers’, those who provide their information technology are ‘information technology specialists’, ‘financial planners’ are, ‘accountants’ are, ‘senior claims officers’ are, ‘underwriters’ are, ‘assessors’ are, ‘business analysts’ are, ‘personal lending specialists’ are, ‘team leaders’ are, but Client Advisers are not within Level 6 or Level 5. There is suddenly a gap in award coverage. UBS sought to draw various distinctions between the jobs in the indicative lists and the UBS Client Adviser job, involving an analysis of functions and qualifications 35.

[45] However, the ‘Indicative job list’ in each classification is not a complete list of all jobs within the classification. It indicates the type of jobs that fall within that level. It is not fatal that the indicative list does not include the terminology of ‘Client Adviser’. It is not enough for different terminology to be used to describe a job together with some changes to duties for a Level 5 or 6 job to be changed into a non-award job and employee. It would be a strange result if that were sufficient. A Client Adviser at UBS is clearly a similar type of job to these other jobs. There is some degree of similarity or even overlap between for example financial planners and Client Advisers. Both could be said to be broadly financial or investment advisers or similar terminology. It may be that a financial planner may be said to require additional qualifications. A sensible non-technical approach to such classification levels has to be taken.

[46] On the evidence and submissions before me the position of Client Adviser at UBS performed by Mr. Marshall is a ‘specialised role ... requiring formal qualifications and/or specialised vocational training’ in Level 5, or a managerial role within Level 6, in which he was responsible for ‘conduct of the part of the business’, namely that part constituted by his clients for whom he was the Client Adviser. The modern award applied to Mr. Marshall’s position.

Clause 8 - Consultation

[47] Did UBS comply with clause 8 Consultation of the award?

[48] Clause 8 of the award provides:

“8. Consultation regarding major workplace change

8.1 Employer to notify

(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

8.2 Employer to discuss change

(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1.

(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.”

[49] In Ulan Coal Mines Limited 36a Full Bench of the tribunal said:

“[27] As a general principle, there are sound reasons as a matter of good practice for there to be consultations and discussions with the particular employees or groups of employees to be dismissed due to redundancy. As the Commissioner notes in his decision, such discussions may enable “a better focus on individual circumstances and opportunities available in order to mitigate adverse effects” (at par [58]). However, whatever the general desirability of such consultations might be, the inquiry in the particular factual circumstances of the present case and for the purpose of determining whether the requirement in s.389(1)(b) of the Act is satisfied, must be directed to the proper construction of the obligation set out in sub-clause 23.1 of the Agreement.

[28] Sub-clause 23.1 is in somewhat similar terms to the consultation provisions determined in the TCR Cases. It is clear that the intention in those cases is that the employees and their representatives should be involved in the problems of redundancy as soon as a firm decision has been taken that retrenchments might be necessary (see TCR Case [1984] 8 IR 34, at 62-64). This intention can also be discerned from the wording of sub-clause 23.1 of the Agreement itself. The requirement is for discussions to begin “as soon as is practicable” after a definite decision is made about redundancies. The decision is described in the sub-clause as one which “may” lead to termination of employment (par 23.1(1)) and the discussions to be held will include consideration of the reasons for “proposed terminations” and measures to “avoid or minimise the terminations” (par 23.1(2)). The discussions as such will be of relevance to the entire workforce of an enterprise or at least to that part of the workforce whose work or jobs will be affected by terminations due to redundancy. In the present case, this would be the mineworker employees at the mine. These are the employees “directly affected” by the decision to change the size and composition of the mineworker workforce at the mine and the group with whom the Company must hold discussions. The discussions are envisaged to take place before the number of terminations is finalised and the particular employees to be retrenched are identified.

[29] The benefit of having discussions at an early stage of the process is that it will allow the employees an opportunity to influence such decisions and to put proposals as to measures to avoid or minimise the terminations and to mitigate any adverse effects of the terminations on the employees concerned. In some cases, the discussions and consultations may cover the basis on which employees to be retrenched due to redundancy will be selected. However in the present matter this is determined by the Agreement to be according to seniority. Were it not for this factor, we consider there might be more weight to the Applicants’ submissions concerning more individualised consultation in connection with the impending retrenchments.

[30] In the present case, the Company held discussions about the restructure and consequent redundancies with the entire workforce, including the mineworkers who were dismissed. There was evidence that each of the Applicants was present during the consultation meetings. The CFMEU as the representative of the employees was also involved and the discussions covered the matters referred to in paragraph 23.1(2) of the Agreement, namely the reasons for the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate adverse effects.

[31] We do not consider, in the particular circumstances of the present matter and having regard to the obligation under sub-clause 23.1 of the Agreement, that a further round of discussions was required to be held by the Company with the employees to be dismissed, either separately or as a group. This does not mean that such separate discussions might not be worthwhile and appropriate e.g. as part of the consideration of measures to mitigate the adverse affects of terminations or to ensure that opportunities for other employment and assistance are properly examined. However they are not part of the discussions envisaged and required under sub-clause 23.1 of the Agreement and that is the test in these particular circumstances. In different circumstances this will of course vary according to the terms of particular awards and agreements.

[32] The Commissioner found that the Company had complied generally with the obligation in the Agreement by consulting with the CFMEU and the mineworker employees generally about the redundancies. This was sufficient to satisfy the requirement in s.389(1)(b) of the Act.”

[50] Consultation about a redundancy is well established as an important means of improving decision making about the redundancy, and for providing employees and others with an opportunity to put a case: Crozier v. Palazzo Corporation Pty Ltd 37. This has now been given statutory force in the form of s.389.

[51] UBS submits that there were five conversations which taken together amount to compliance with the clause: a conversation on 12 September 2011 between Mr. Campbell, Ms. Rodas and Mr. Marshall, a conversation on 13 September 2011 between Mr. Campbell and Mr. Marshall, a conversation on 13 September 2011 with Mr. Clarke Morgan 38, and two conversations between Ms. Rodas and Mr. Marshall39. Counsel for UBS relies on the Full Bench decision in Ulan for the proposition that it is not an obligation to consult ‘in the manner the tribunal thinks is appropriate or fair’, but in accordance with the ‘strict terms of the award and no more’, and that ‘if you meet the criteria of the award you don’t have to have a second round of consultation’40. Counsel for Mr. Marshall submitted that ‘Mr. Marshall gives evidence41 that he’s trying to find out what’s going on, and all he is met with are blank stares from Mr. Campbell. His evidence has to be accepted over that of Mr. Campbell because Mr. Campbell has not been called’42. However, UBS is currently in some conflict with Mr. Campbell, who is leaving the organisation, and that is a satisfactory explanation for the UBS failure to call him. No inference for that failure should be drawn. In any event, Mr. Williams has been called, together with Ms. Rodas.

[52] Turning to deal with the specific requirements of clause 8, firstly, counsel for UBS submits that the requirements of clause 8.2(a) were met in the discussion held on 12 September 2011. Ms. Rodas gave evidence that on 12 September 2011, she and Mr. Campbell, Melbourne Market Manager, met with Mr. Marshall. She said that the words in a script attached to her witness statement were used by Mr. Campbell. Mr. Campbell told Mr. Marshall that UBS had announced a ‘significant cost reduction plan and all business areas are currently reviewing their costs and resources to improve efficiency and reduce costs’, that a number of positions at UBS Wealth Management would be made redundant, and that Mr. Marshall’s position was one of those positions at risk. He said that a final decision had not been made, that the review would be finalised over the coming days, and that Mr. Marshall was encouraged to approach him to ask any questions he might have, and that a further meeting would be held with Mr. Marshall on 16 September 2011. Mr. Marshall was provided with a vacancy list. Mr. Marshall expressed surprise about being nominated for redundancy because he was he said ‘one of the high revenue earners, I just don’t understand’ 43. A letter was handed to Mr. Marshall. The letter said that Mr. Marshall would be consulted about the potential redundancy of his role, that suitable alternative employment would be sought if his role was made redundant, and that termination would only take place after further consultation with him.

[53] Mr. Marshall gave evidence about this conversation and his evidence is largely consistent with the account given by Ms. Rodas 44. However, he claimed that he asked Mr. Campbell for ‘the other factors that you’re making this decision and he sat there blank-faced’, and refused to provide such criteria45. Ms. Rodas did not appear to remember such a request46.

[54] I am not satisfied that Mr. Marshall made the request that he claims he made. Ms. Rodas made notes of what was said and then typed those notes up, and her evidence does not record any such request being made. Mr. Marshall on the other hand did not have the benefit of notes and was understandably emotional in his recollections of the meetings and conversations. Nor did Mr. Marshall include in his witness statement his claim that he asked Mr. Campbell for the criteria but was refused. I am not satisfied that this omission was because ‘I didn’t think that was relevant’ 47. Clearly such a refusal would be relevant because it would suggest that UBS were not genuine in the consultation they were engaging in, or had not actually consulted as they were obliged to do. I would also prefer the evidence of Ms. Rodas and Mr. Williams where it came into conflict with that of Mr. Marshall.

[55] I am satisfied that on 12 September 2011, UBS complied with the obligations it had to notify Mr. Marshall contained in clause 8.1(a) of the award.

[56] Were the obligations to discuss change in clause 8.2 met? Mr. Marshall gave evidence about conversations he had with Mr. Campbell on two occasions on 13 September 2011. Mr. Marshall said that on 13 September 2011 he approached Mr. Campbell and asked him ‘to reconsider the decision. He then informed me that no decision had been made yet about my employment but would be by Thursday 15 September 2011’, and suggested that he leave the office as the others under consideration for redundancy had done 48. Mr. Marshall had the option of asking Mr. Campbell about any of the matters raised in clause 8.2(a), but did not do so. Mr. Marshall raised no matters other than a reconsideration of the decision. This meeting was a direct result of the statement made on 12 September by Mr. Campbell that ‘During this time, I encourage you to approach myself or HR with any questions you may have or to discuss other suitable roles within the Firm’49.

[57] Ms. Rodas spoke to Mr. Marshall by telephone on 14 September and on 21 September 2011. The first conversation concerned Mr. Marshall attending a meeting with UBS on 15 September 2011. Mr. Marshall had provided UBS with a medical certificate stating that he was ‘unfit for work’ from 13 September 2011 to 20 September 2011. Mr. Marshall said in effect that he would not attend the 15 September meeting, ‘It is best we leave it’. He refused to agree to attend on 21 September 2011 instead, although his sick leave certificate did not apply on that date, and neither he nor his employer had a clear reason to believe that he would be sick on that date. The 15 September meeting had been arranged at the 12 September meeting, and was mentioned by Mr. Campbell to Mr. Marshall on 13 September 2011.

[58] On 21 September 2011, Ms. Rodas sent to Mr. Marshall paperwork about his redundancy, after being informed that his redundancy had been confirmed. Mr. Marshall rang Ms. Rodas that day and acknowledge receipt of the paperwork, said that UBS were recruiting, and other issues.

[59] Despite Mr. Marshall’s medical certificate, and unwillingness to attend meetings to discuss his potential redundancy on either 15 September or 21 September 2011, Mr. Marshall wrote letters to UBS about his potential redundancy on 15 September, 16 September, and 20 September 2011. Mr. Marshall refused to attend a meeting on 21 September 2011 although this medical certificate did not state that he was unfit for work on that date. He also made the refusal to attend on 14 September 2011 when he was unaware of what his medical condition would be on 21 September 2011. Mr. Marshall did not provide any medical certificate stating that he was unfit for work on 21 September 2011, but did provide a medical certificate stating that he was unfit for work from 22 September 2011. 50

[60] Throughout the redundancy process Mr. Marshall’s central, if not only concern, was to avoid being made redundant. He was given many opportunities to put views on that issue, ask questions, and respond to answers. He was in fact given more opportunities than he took up, because he refused to meet with UBS on 21 September 2011 at which time he could have asked whatever questions he thought necessary. I am satisfied that on the medical evidence before me, there was no barrier to Mr. Marshall attending a meeting at UBS as requested on 21 September 2011, but that he chose not to for reasons which may have included a desire to delay the redundancy process. I am also satisfied because of the letters sent by Mr. Marshall, and the conversations held with Ms. Rodas, that he was able to effectively communicate with UBS about his potential redundancy by telephone if he chose to do so, but did not choose to do so. I am satisfied that the conversations held on 12 September, 13 September and subsequently amount to compliance with the obligations set out in clause 8.2(a). UBS discussed with Mr. Marshall the effect of the redundancy on him, the effect it was likely to have on him both personally and in terms of his job, and ways of avoiding him being made redundant through identifying jobs into which he could potentially be redeployed.

[61] As to clause 8.2(c), UBS sent Mr. Marshall a letter on 12 September 2011, which made clear to him the nature of the changes proposed, the expected effect of the changes on Mr. Marshall and others to be made redundant, and other matters. In that letter, UBS sought information to facilitate the identification of suitable alternative roles, which Mr. Marshall did not provide. UBS did not provide all the material sought by Mr. Marshall but in the circumstances, I am not satisfied that this was relevant information. This is a decision on the facts before me, because what is relevant will vary with the circumstances. It must be relevant to making consultation effective and to the matters listed in clause 8. I am satisfied that all relevant material was provided.

[62] In any event I have had the benefit of hearing the views put by Mr. Marshall in relation to the redundancy. Those views do not persuade me, to the extent that it is relevant, that UBS was mistaken in the decision to make him redundant, or that if UBS had provided him with further material that would have made any material difference to the consultation process or decision: McCarthy v. FJ Trousers Pty Ltd 51.

[63] I am satisfied that the requirements of clause 8 are met. I am also satisfied that Mr. Marshall did not cooperate in the consultation process by reason of not making himself available on at least 21 September, a time during which there was on the material before me no satisfactory explanation as to why he could not attend a meeting, and ask what questions and put what views he wished.

Section 389(2) - Was it reasonable to redeploy Mr. Marshall?

[64] In Ulan Coal Mines Limited v. Honeysett and others 52, a Full Bench of the tribunal considered s.389(2) and said:

“[28] 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.”

[65] In Jenny Craig Weight Loss Centres Pty Ltd v. Margolina 53 a Full Bench of the tribunal quoted this passage and concluded on the facts before it that:

“[28]In this case it is clear that there was a centre leader position available. The respondent had the necessary skills, qualifications and experience and she had no objection based on location. While the income was much lower and the responsibility much less than for a regional manager, she gave evidence that she would have accepted a centre leader role for reasons which we have referred to above. There is no reason to disbelieve the respondent’s evidence, even though she has now taken a leadership role, which appears to be similar to her former role with the appellant.

[29]We agree with the Commissioner’s conclusion that it would have been reasonable in all the circumstances for the respondent to have been redeployed. It follows that the dismissal was not a case of genuine redundancy.”

[66] In this case on 12 September 2011, Mr. Marshall was provided with a list of vacancies at UBS 54. I am satisfied that the list was genuine and bona fide. Mr. Marshall did not at any time indicate an interest in any of the positions contained in the list, and no suitable alternate position with UBS was identified55, despite the reasonable efforts of UBS. I am therefore, not satisfied that it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer within s.389(2) of the Act.

Conclusion

[67] For these reasons, I am satisfied that the termination of Mr. Marshall’s employment was a genuine redundancy within s.389 of the Act. Section 385(d) accordingly has effect and provides that his application is not an unfair dismissal. I am therefore required to dismiss his application. An order is contained in PR521474.

[68] For the sake of completeness, and because the applicant was committed to seeking the remedy of reinstatement, I would add that I would not have considered that such an order would be appropriate even if I had found that the redundancy was not a genuine one, and the dismissal was unfair. Mr. Marshall considered that UBS was responsible 56 for the actions of four employees who he considered slandered him about his work performance57, was critical to a serious degree of various aspects of UBS research and support58, and there was no vacant position. The proximity of these three remaining employees in the workplace, the fact that the applicant had a difficulty with overall UBS management, policy and practice, and a certain fixedness of view on the part of Mr. Marshall which manifested itself while he gave evidence, persuades me that there would have been an unworkable degree of conflict between Mr. Marshall and UBS if he had returned to work such that reinstatement would not be appropriate within s.390 of the Act.

DEPUTY PRESIDENT

Appearances:

G. McKeown, of counsel, for the applicant.

T. Saunders, of counsel, for the respondent.

Hearing details:

2012
Melbourne
February 9 and 29.

 1   PN2316

 2 (1977) 16 SASR 6

 3 (1984) 8 IR 34 and (1984) 9 IR 115

 4   Award Simplification Decision, December 1997, Print P7500, p.17

 5   See Markac v. CSR Limited [2010] FWA 4548, 2 July 2010, Hamilton DP

 6   Eg. Windsor Smith v. Liu, 13 July 1998, Print Q3462

 7 Section 643(8) of the Workplace Relations Act 1996 (‘Work Choices’).

 8 Schedule 10; section 170CA(1)(e) of the Workplace Relations Act 1996

 9 Section 381 of the Fair Work Act 2009

 10   [2010’ FWAFB 3488 at paragraph 16-17

 11   Outline of Respondent’s Submissions, UBS2, paragraphs 9-13

 12   Outline of Applicant’s Submissions paragraphs 9-14

 13   Exhibit UBS5, witness statement of Paul Williams, paragraphs 8-21

 14   Exhibit UBS9, witness statement of Kristen Marie Rodas, paragraphs 4-17

 15   Exhibit UBS8, ‘Message from Jurg Zeltner: Impact of UBS cost reduction plans on WM’; 23 August 2011 email from Graham Francis.

 16   PN2356-2361

 17   PN2362

 18   Exhibit M1, Outline of the Applicant’s Submissions, paragraph 9

 19   PN2585

 20   Eg. Anderson v. RSPCA Tasmania, [2012] FWA 1711, 5 March 2012, Roe C

 21   Eg. Adam v. Valentine Grace Pty Ltd, Print Q8098, Williams SDP

 22   PN1616-1619

 23   PN2585

 24   Outline of Applicant’s Submissions paragraphs 2-7

 25   [2009] AIRCFB 345 at paragraphs 133-141

 26   Ibid paragraph 137

 27   [2011] FWAFB 6884

 28   Exhibit UBS5, witness statement of Paul Williams, paragraphs 5-7

 29   PN1095

 30   PN1228

 31   PN592-604; PN638-652

 32   PN2015

 33   PN430

 34   PN570-604

 35   PN2491-2

 36   [2010] FWAFB 3488

 37   Ross VP, Acton SDP, Cribb C, Print S5897, 11 May 2000.

 38   PN736

 39   PN2524-2525

 40   PN2507

 41   PN692

 42   PN2589

 43   Exhibit UBS9, witness statement of Kristen Rodas, Attachment KMR1.

 44   PN654-689; Exhibit M2, witness statement of Justin Marshall, paragraphs 13-34

 45   PN683-PN686

 46   PN1802-1803

 47   PN686-688

 48   Exhibit M2, witness statement of Justin Marshall, paragraph 17

 49   Exhibit UBS9, witness statement of Ms. Rodas, attachment KMR1

 50   Exhibit M2, witness statement of Justin Marshall, paragraphs 19-25

 51   Watson SDP, Print T1853, 12 October 2000

 52   [2010] FWAFB 7578

 53   [2011] FWAFB 9137

 54   Exhibit UBS 9, Attachment KMR3

 55   Exhibit UBS 9, paragraph 12

 56   PN920; PN923

 57   PN915-916; PN922

 58   PN2577; PN785-790

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