Jason Dunne v Viatek ICT Pty Ltd
[2014] FWC 2739
•3 JUNE 2014
[2014] FWC 2739 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jason Dunne
v
Viatek ICT Pty Ltd
(U2013/15687)
COMMISSIONER GREGORY | MELBOURNE, 3 JUNE 2014 |
Application for relief from unfair dismissal.
Introduction
[1] Mr Jason Dunne was employed by Viatek ICT Pty Ltd (Viatek) in November 2012 in a Corporate Sales Executive role. His appointment was part of a push by Viatek to develop an ICT service business alongside its traditional print services business.
[2] Just over 12 months later on 28 November 2013 Mr Dunne’s employment was terminated. Viatek submits his dismissal was a case of “genuine redundancy” and, as such, cannot be a case of unfair dismissal. Mr Dunne rejects this argument. He submits the job is still required to be carried out. He also says there was no consultation with him about the position being made redundant, or about any other employment opportunities that might be available within the organisation or any related entities.
[3] Section 385 of the Fair Work Act 2009 (Cth) (the Act) states:
“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.”
[4] Section 389 of the Act continues to set out the meaning of “genuine redundancy.” It states:
“(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.”
[5] Section 396 of the Act also provides that before considering the merits of any unfair dismissal application the Commission must determine “whether the dismissal was a case of genuine redundancy.” 1
[6] Mr G. Hills of Heinz & Partners was granted leave to appear on behalf of Viatek under s.596(2)(a) on the basis that the matter involved a degree of complexity and his involvement would enable the matter to be dealt with more effectively.
The Issue to be Determined
[7] In summary, s.385(d) provides that if an employee’s dismissal is determined to be a case of “genuine redundancy,” as defined under s.389, then the employee has not been “unfairly dismissed” and the application must be dismissed.
[8] Therefore, was Mr Dunne’s dismissal a case of “genuine redundancy?”
The Evidence and Submissions
[9] Mr Dunne submits his termination should not be construed as a case of “genuine redundancy”. He submits the role he was employed in is still required to be performed. He also says there was never any genuine consultation with him about the future of his role, the role being made redundant, or possible redeployment opportunities elsewhere.
[10] Mr Dunne said various commitments made to him prior to being employed were not followed through by Viatek. He said he only received limited training upon commencement; a promised refurbishment of the office in Geelong to attract retail sales did not eventuate, and staff he was to work with were relocated to other positions. He also said he received little support in his role from senior management, and promised customer lists and weekly sales meetings were not delivered or organised. He also said customers were provided with limited technical support and backup.
[11] Mr Dunne also said he believed the role he was performing was still required and the true sales and profit figures, and the number of customers he was responsible for, had been “manipulated” to make it look as though the position was no longer required. 2 He also said the account management responsibilities associated with existing customers were not properly factored into his role and responsibilities and indicated:
“I was employed basically in a role that wasn't there and there was no real training provided. There was a lot of false hope.” 3
[12] He also submitted there had been no real consultation with him about his position being made redundant, apart from the discussions that took place on his final day at work, and he had initiated the discussions about his possible redeployment. He also said that while the position is not currently filled it is still required and customers of the business were still making contact with him seeking follow-up services.
[13] He also indicated in regard to the possible redeployment option that it was at a “knock on the doors” level that he had moved beyond, given his level of seniority and experience. 4 He now considered himself to be better suited to an account management role in a large organisation, rather than being involved in “start-up sales”.5
[14] He also said in response to a question from the Commission he believed the business had now adopted a different strategy and approach, but he was disappointed that more thought and planning had not been given to the business direction the Company was pursuing at the time when he was employed.
[15] Viatek submits Mr Dunne’s dismissal was a case of genuine redundancy because:
- it had determined it no longer required his job to be performed by anyone because of changes in its operational requirements; and
- it had consulted with him about his position being made redundant and determined it was not reasonable for him to be redeployed within its business or that of any other associated entity.
[16] Mr Matthew Batten is employed as the Operations Manager at Viatek. He said when Mr Dunne was employed his appointment was part of a strategy for Viatek to build an ICT business alongside its traditional print services business. Mr Dunne’s role was to grow the client base in the Geelong/Surf Coast area with new clients to be developed from his existing business contacts. He was not employed to service existing clients in the Ballarat region.
[17] Mr Batten said the decision to make Mr Dunne’s position redundant was subsequently taken after a process of review of the business operations which began in May 2013. It was carried out because in the preceding six months Viatek’s business operations had only derived a pre-tax profit of $8,500, and the review confirmed there had been little or no business growth in the Geelong/Surf Coast region to warrant Mr Dunne’s position being retained. He emphasised the decision to remove the position was not related to Mr Dunne’s work performance, or the exercise of his responsibilities.
[18] Mr Batten said the option of redeploying Mr Dunne in a separate and discrete company, Viatek Western Victoria Pty Ltd, was considered but later rejected after a personality profiling process indicated Mr Dunne would not be an appropriate choice for the position. In addition, the role had a base rate of salary of less than half of what Mr Dunne was receiving.
[19] Mr Batten said the decision to make the position redundant was discussed with Mr Dunne at the meeting on 28 October 2013. He said he went through a statement summarising what had been achieved in the time Mr Dunne had been employed, which was “...indicative of the fact that the strategy that we had tried to employ was not working and was resulting in significant losses to the business which were unsustainable.” 6 The statement indicated in part, “Over the past 11 months, the role has only returned $35,152 profit (which is an average of $3,195 per month), but over the same period, wages alone have been $104,500 (or $9,500 per month). Regrettably this means your employment will terminate.”7 He said Mr Dunne responded by indicating he understood why the decision had been taken and making the position redundant was probably not unexpected.
[20] Mr Batten said the change in approach meant that instead of trying to grow internally the business had adopted a strategy of business acquisition. He also said that since Mr Dunne was made redundant no-one has been appointed to the position.
[21] Mr Batten also said he understood Mr Dunne’s employment was covered by the terms and conditions of the Commercial Sales Award 2010, 8 although he was engaged on a salary package of $99,800, together with a car allowance in excess of $2,000 per month.
[22] Mr Batten was asked in cross-examination whether there were positions available in the businesses Viatek was now looking to acquire that could have been suitable for Mr Dunne. He indicated in response the process of business acquisition was being worked through and there were no guarantees about the timing of any acquisitions, or the opportunities that might be available. He said two companies had been acquired to date and discussions about other possible acquisitions were extensive and ongoing.
[23] Viatek submitted in conclusion that Mr Dunne was obviously critical both of the business model it had adopted, and of the level of support provided to him during his employment. However, it submits this is not relevant to the decisions made about the structure of its business operations, and it was free to decide how it intended to offer its services to the market at any point in time.
[24] It also submitted that if the Commercial Sales Award 2010 did apply to Viatek in terms of its employment of Mr Dunne, then it had complied with any consultation provisions existing under the Award. It had also, in its submission, complied with the requirement to consider reasonable redeployment opportunities elsewhere.
Consideration
[25] I have some sympathy for Mr Dunne. He appears to have left a secure and long-standing position to take on what purported to be a senior and expanding role at Viatek. It also appears that a number of commitments made to him at the time he was employed about the role, and how it would be structured, were not fulfilled. It is also clear from the submissions and evidence that his work performance and the exercise of his responsibilities were not the basis for his dismissal.
[26] However, as indicated at the outset the Commission is required to determine whether Mr Dunne’s termination was a case of “genuine redundancy” as provided for by the Fair Work Act. Section 389 deals with the meaning of “genuine redundancy.” It is reproduced in the introduction to this decision and is not restated now. The meaning of “genuine redundancy” was also considered by a Full Bench of Fair Work Australia in Ulan Coal Mines Limited v Henry Jon Howarth 9. It considered the meaning and application of the relevant statutory provisions, including the words:
“...the person’s employer no longer requires the person’s job to be performed by anyone.”
[27] The Full Bench noted those words have long been used and applied as a practical definition of redundancy. It also made reference to the Explanatory Memorandum that accompanied the Fair Work Bill 2008 and the examples provided as to when a dismissal will be a case of genuine redundancy set out in the following terms:
- 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.” 10
“1548. The following are possible examples of a change in the operational requirements of an enterprise:
[28] Regardless of the commitments made to Mr Dunn prior to his employment commencing I am satisfied that 12 months later Viatek decided to adopt a different business strategy in response to how the business was performing. Instead of trying to grow an ICT business internally the evidence of Mr Batten, in particular, indicates it decided to change direction and to try and build the business by acquiring already established businesses. This shift in strategy and direction appears to have been acknowledged to some extent by Mr Dunne, notwithstanding his ongoing concern about the lack of support previously provided to him, and the fact some customers in the Geelong/Surf Coast area were unhappy about the level of follow-up account management available to them.
[29] I am accordingly satisfied that because of the decision by Viatek to change the operational requirements and focus of its business it no longer required Mr Dunne’s job to be performed by anyone and the position is accordingly redundant.
[30] However, s.389 of the Act also requires that for a termination to be a case of “genuine redundancy” the employer must have complied with any obligation in a Modern Award or Enterprise Agreement that applies to consult about the redundancy. Viatek suggested in its submissions that the Commercial Sales Award 2010 may have coverage over the work that Mr Dunne was engaged to perform and Mr Batten indicated in his examination in chief he believed this was the case. However, Viatek also submits that regardless it has complied with any obligations existing under the Award to consult.
[31] Mr Dunne was employed as a Corporate Sales Executive on a salary package at commencement of $99,800, together with an additional monthly car allowance. At the time he was employed he was also told he would be required to manage other employees, although shortly afterwards those employees were relocated to other positions.
[32] The coverage clause in the Commercial Sales Award 2010 is contained in clause 4 and indicates the Award “...covers employers throughout Australia with respect to Commercial Travellers, Merchandisers and Advertising Sales Representatives...” 11 Each of those job titles are defined in clause 3, ‘Definitions and interpretation,’ of the Award in the following terms:
- Commercial Traveller means a person employed, substantially away from the employer’s place of business, for the purpose of soliciting orders for, or selling articles, goods, wares or merchandise or material for wholesale sale, for resale, or for use in or in connection with the production and/or preparation and/or distribution of commodities for sale by the customer.
- Merchandiser means a person who is employed away from, or substantially away from, the employer’s place of business in promoting the employer’s products, re-ordering stock and preparing display units and gondola ends, and who in conjunction with these principal functions may solicit orders as a minor feature of the employee’s work.” 12
“ Advertising Sales Representative means a person employed, substantially away from the employer’s place of business, in soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for, or selling advertising space or time of any kind.
...
...
[33] Clearly an Award can still have coverage even though the level of salary and other entitlements being provided to an employee are in excess of those provided for in the Award. However, in the present matter I am satisfied the level of Mr Dunne’s entitlements and seniority were such that he was not a person that can be considered to be covered by the Commercial Sales Award 2010. He received a salary that was almost three times the maximum salary provided for in the Award. His Position Description indicates he was also charged with responsibilities that involved a much greater degree of independence and initiative than those contained in the job titles set out in clause 3 of the Award. I am accordingly satisfied that regardless of what consultation took place there was no Modern Award or Enterprise Agreement in place with coverage of Viatek that imposed particular requirements on it to consult with Mr Dunne about his position being made redundant.
[34] Section 389(2) of the Act also 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, either within the business, or within an “associated entity.” Viatek submits the option of redeployment was considered but no suitable options were available. Mr Dunne submits he initiated discussions about the possibility of redeployment with another business, although Viatek submits it was not “an associated entity” of Viatek. 13
[35] Viatek appears to have gone through a considered process in terms of Mr Dunne’s suitability for redeployment, even though it takes issue with whether the business in question was an “associated entity”. It provided details of a placement report following Mr Dunne’s participation in a placement planning process. Mr Dunne also appeared less than enthusiastic about this option, noting it was at a “knock on doors” level involving a “start-up sales” role he had moved well beyond given the level of seniority and experience in his recent appointments.
[36] The evidence and submissions also indicated the possible redeployment option was a substantially different role from the one Mr Dunne was employed in when he was made redundant. It appeared to be more akin to a sales role covered by the Commercial Sales Award 2010 and involved a base level of salary that was less than half what he was earning at the time he was made redundant.
[37] The question of what is required in terms of the obligations imposed by section 398(2) was considered by the Tribunal in Ulan Coal Mines Limited v Honeysett and Others 14. The Full Bench stated at [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.” 15
[38] I have also had regard to the decision of a Full Bench in Jenny Craig Weight Loss Centres Pty Ltd v I. Margolina 16 (Jenny Craig). In that matter the employer did not make an offer of redeployment to a senior employee made redundant because it believed that option was effectively an entry level role that would be “...such a drop in responsibility and remuneration it was a complete insult”.17 However, the employee indicated in cross-examination she would have been prepared to take on the lesser role. The Full Bench indicated in response:
“[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.” 18
[39] This decision requires consideration about whether Viatel should have offered Mr Dunne the sales role that appears to have been available at the time of his dismissal, even though it attracted a salary that was less than half of what he was earning at the time. I am satisfied in response that the decision in Jenny Craig can be distinguished in the circumstances of the present matter for two reasons. Firstly, Viatel appears to have gone through a considered process in assessing Mr Dunne’s suitability for the role. In this context I refer, in particular, to the personality profiling undertaken as part of the process of coming to the decision he was not necessarily a suitable candidate for the role, even though it involved a much lower salary level.
[40] Secondly, Mr Dunne was at best a reluctant candidate for the role. He said he believed he had moved well beyond those roles, and his experience and the level of seniority he had attained during his career meant he was much better suited to an account management role, preferably in a larger organisation. This is an entirely understandable view from someone who has been in various senior roles over a period of time.
[41] The decision in Ulan Coal 19 found that the question of whether redeployment at the time of dismissal is reasonable depends upon various factors in any given case. I am satisfied the fact the employer in this case has gone through a considered process and found that the employee is not a good fit for the redeployment role, combined with the fact the employee is reluctant to take on the role, should be included among those factors. I am satisfied that there are only certain obligations placed on an employer in considering redeployment, and it is not necessarily “reasonable in all the circumstances” for a person to be redeployed where neither they, nor their employer, believe they are suited to the role. Therefore, leaving aside any issues about whether the business was an associated entity I am satisfied the process gone through to evaluate Mr Dunne’s suitability for the role, his apparent reluctance to take on the position, and the significant disparity in terms and conditions, mean it was not reasonable in all the circumstances for him to be redeployed to that position. There was also no evidence provided of any other position at Viatek or an associated entity that might otherwise have been a reasonable redeployment option.
[42] I have considered all of the evidence and submissions I believe are relevant to the issue of whether Mr Dunne’s dismissal was a case of genuine redundancy. I have also had regard to the relevant provisions of the Fair Work Act 2009. I am satisfied in all the circumstances Mr Dunne’s dismissal was a case of “genuine redundancy,” as defined in the Act. It therefore follows that Mr Dunne is not a person under s.385 who has been “unfairly dismissed.” The application is accordingly dismissed.
COMMISSIONER
Appearances:
Mr Dunne appeared on his own behalf.
Mr G Hills of Heinz & Partners appeared on behalf of the Respondent.
Hearing details:
2014.
Ballarat:
25 March.
1 Fair Work Act 2009 (Cth) at s.396(d)
2 Transcript at PN149
3 Ibid at PN17
4 Ibid at PN30
5 Ibid at PN168
6 Ibid at PN82
7 Exhibit H3 at attachment A, para 2
8 MA000083
9 [2010] FWAFB 3488
10 Explanatory Memorandum, Fair Work Bill 2008, 1548
11 MA000083 at cl.4
12 Ibid at cl.3
13 Transcript at PN105-PN109
14 [2010] FWAFB 7578
15 Ibid at [28]
16 [2011] FWAFB 9137
17 Ibid at [24]
18 Ibid at [28]-[29]
19 [2010] FWAFB 7578
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