John Dlima v Receivables People Solutions Pty Ltd, t/a ARL Collect

[2024] FWC 1520

[2024] FWC 1520

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

John Dlima
v

Receivables People Solutions Pty Ltd, t/a ARL Collect

(U2024/2705)

DEPUTY PRESIDENT COLMAN MELBOURNE, 12 JUNE 2024

Unfair dismissal application – genuine redundancy – application dismissed

1. John Dlima has made an application under s 394 of the Fair Work Act 2009 (Act). He contends that he was unfairly dismissed by Receivables People Solutions Pty Ltd (RPS), which trades as ARL Collect, and seeks reinstatement. RPS submits that the dismissal was a case of genuine redundancy within the meaning of s 389 of the Act and contends that in any event the dismissal was not unfair because his position was not needed and he was dismissed following a fair process.

1. Mr Dlima was employed as a customer relationship officer (CRO) in the PayPal team of ARL Collect Pty Ltd, an associated entity of RPS, which together with PF Group Holdings Pty Ltd (Panthera Group) and Panthera Finance Pty Ltd (Panthera Finance) carry on the business of debt purchase and recovery. Mr Dlima was covered by the Banking, Finance and Insurance Award 2020 (Award).

1. Frank Terranova, the group chief financial officer, gave evidence that in the past two financial years the group has sustained losses exceeding 30 million dollars. He said that the group’s financial position was precarious, and that to stay financially viable, it had to reduce operating expenses, including labour costs. To do this, the decision was made to restructure and downsize the companies in the group. On 2 January 2024, he sent an email to the group advising all staff that it would be necessary to reduce the group’s workforce and that some positions would be made redundant. He said that the group then worked through the restructure of each entity one at a time and that ultimately 78 employees were made redundant across the group.

1. Robert Whelan, general manager, gave evidence that in January 2024 he met with Amy Kayani, human resources officer, to consider how the ARL business, including its PayPal team, could be restructured. On 9 February 2024, he put forward a proposal which contemplated a reduction in the PayPal team from 4.5 full-time equivalent employees (FTEs) to 2. At that time, the team comprised a team leader and 6 CROs, 3 of whom were full-time, including Mr Dlima, as well as two part-time employees and one casual. Mr Whelan considered that there was significant scope for efficiencies to be made in the PayPal team in addition to a reduction in numbers, including dialler speed efficiencies, directing customers to the portal, and reallocating the team leader’s duties to the Echuca team leader. One factor that Mr Whelan took into account was that PayPal had flagged that it would be onboarding an additional debt collection agency, which would reduce business volume. Another was that as of February 2024, referrals had been steadily dropping off for several months. He also considered that, even with the present level of referrals, the team could achieve the same number of contacts with only 2 FTEs rather than the current 4.5, due to other efficiency measures. Mr Whelan said that human resources then prepared a skills matrix to determine which employees in the PayPal team would be retained. He had input into the factors that would be included.

1. Ms Kayani’s evidence was that the skills matrix included the number of calls per day, average wait times, quality breaches, and experience. Ms Kayani said that the outcome of the skills assessment was that Mr Dlima was not in the top two performers. He later objected that certain quality breaches had not been his fault but were instead the consequence of an access problem that he had experienced, but even without these breaches, he was still not in the top two performers. Mr Whelan said that Mr Dlima was ranked fourth out of six, and was the lowest ranking of the 3 full-time employees. Across the team, two full-time CRO roles were retained. Mr Dlima’s role was made redundant, as were the two part-time roles and the casual position.

1. Mr Whelan said that on 20 February 2024 he sent an email to staff, including Mr Dlima, stating that the business had made a decision about rightsizing and that a consultation process was now beginning. He and Ms Kayani spoke with employees who might be affected. On 21 February 2024 they met with Mr Dlima and told him that only 2 CRO positions were required in his team, that his position was redundant and that he would likely be terminated on the grounds of redundancy. He was told that there was a vacant position with Panthera Finance, a team leader role in Brisbane, and he was invited to submit an expression of interest for it. He was told that there was now a weeklong consultation period, and that any information he provided would be considered before a final decision was made. Mr Dlima said that he thought that an anti-bullying application he had brought against the company had affected his rating. Mr Whelan told him that this was irrelevant.

1. Ms Kayani’s evidence was that Mr Dlima was very upset at the meeting on 21 February 2024, and that she and Mr Whelan said that he should take his time and review the information that would be sent to him, and if he had other questions these could be discussed at a further meeting. She then sent Mr Dlima an email that attached a consultation letter and materials, including a ‘FAQ’ document and a position description for the team leader role in Brisbane.

1. On 23 February 2024, Mr Whelan and Ms Kayani had a second meeting with Mr Dlima, which took place by MS Teams. Mr Dlima said that there was no reason to make him redundant because ARL still had a contract with PayPal. Mr Whelan said that it was more complicated than that and that efficiencies still needed to be made within the team. Mr Dlima said that the process was a sham. Mr Whelan said that over 100 people in the group were being affected, and it was not just about him. Mr Dlima said that any decision should be delayed until after the Commission’s decision in his anti-bullying matter. Mr Whelan again said that this was irrelevant, and that even if the Commission found in his favour, his position would still be redundant. Mr Whelan’s evidence was that during the meeting Mr Dlima was rude and belligerent, so he said to Mr Dlima that if he wanted to raise any further issues he should do so in writing. Mr Whelan said that in the days that followed, Mr Dlima sent him several emails and that he considered their contents, but that they did not cause him to change his mind about Mr Dlima’s proposed redundancy. The consultation process ended on 28 February 2024. Mr Dlima applied for the Brisbane role but was unsuccessful. On 1 March 2024, he was told that his employment was terminated for reason of redundancy.

1. Simon Offord, head of compliance and customer advocacy, gave evidence that the Brisbane-based team leader role was in the resolutions team, which manages and resolves customer complaints in accordance with regulatory and business requirements. This involves providing expert guidance and support to the team and the broader business. Mr Offord said that he reviewed Mr Dlima’s application for the role and determined that he was not suitable. He lacked proven leadership experience in a relevant role. He had no experience resolving difficult or complex complaints. The team leader role was not just a management position, but a specialist one. Mr Offord said that he lacked the fundamental skills required for the position.

1. RPS contended that Mr Dlima’s dismissal was a case of genuine redundancy because it no longer needed his position to be done by anyone due to changes in its operational requirements. It said that Mr Dlima was consulted in accordance with the Award, and he was considered for redeployment, but he was not suitable for the available role. It contended that in any event the dismissal could not be considered unfair with regard to the considerations in s 387, because there was a good reason for the dismissal, which occurred following a fair process. RPS said that the application should be dismissed.

1. Mr Dlima gave evidence about the many concerns he had regarding the company’s conduct during his five years of employment, many of which he had raised with the company. These concerns included the following: company non-compliance with COVID rules (2020); safety risks associated with a direction that staff work in the office (2021); victimisation associated with the cancellation of a vacancy he applied for, and the rejection of his applications for other positions (2022); his bullying complaint against human resources (2022); and the company’s failure properly to deal with his whistleblower complaints and inquiries (2022). From July 2022 to August 2023 he was absent on workers compensation. Shortly before his return, Mr Dlima was told that he would be required to work 7.6 hours a day rather than 7.5. He asked for this to be changed, but the company refused. Mr Dlima lodged an antibullying application in the Commission naming Mr Terranova, Mr Whelan, Ms Kayani, and several others. In August 2023 he applied for flexible working arrangements but this was refused.

1. Mr Dlima said that from August to October 2023 he had a very high workload, as did all other CROs in the PayPal team, and that they were getting around 140 calls a day. Then in November 2023 there was a sudden drop in workload, and consultants were receiving fewer than 80 calls a day. From November 2023 to January 2024 there were many training sessions for the team, which reduced the calls they were taking each day. From December 2023, he was not able to send email confirmations to customers about payment plans. This required him to rely on other team members, and adversely affected his performance. It also led to his being accused of a quality breach in January 2024, when in fact it was the fault of a colleague.

1. Mr Dlima said that at the meeting on 21 February 2024, he found it hard to believe that only 2 CROs would be required in the PayPal team from 1 March 2024, because the team had been working at fifty percent above normal from August to October 2023. He said that the drop in workload had been a result of management action, and that he had been told that the team was performing well and in fact could do with more CROs. He said that at the meeting on 23 February 2024, Mr Whelan and Ms Kayani were stunned that he was interested in the Brisbane role, and that they had not really expected him to apply. He asked the company to defer its decision until the Commission had determined his anti-bullying application, but this was rejected. He was told that any further matters should be put in writing. He then sent a number of emails raising issues for the company’s consideration, including what he regarded as the conflict of interest that affected various managers who were involved in the redundancy process but were also respondents to his anti-bullying application.

1. Mr Dlima contended that his dismissal was not a case of genuine redundancy. He said, in effect, that the company had not presented a persuasive explanation of any financial difficulties requiring the reduction in numbers in the PayPal team. The group position had been consistently bad for several years but it was cash rich and his team had still been busy. He said that the skills matrix did not take account of all his positive attributes, and that he was not properly considered for the team leader position in Brisbane. He said that the successful candidate for that position was an internal person who must have left a vacancy which he could have applied for. He said that the PayPal team redundancies were a sham, and that at the time they occurred PayPal had not yet engaged another provider, and that this remained the case.

1. Mr Dlima said that the evidence did not support a conclusion that his job was made redundant because of changes in operational requirements, and that in fact he was dismissed for other reasons. He said that his job was still required and people were still doing it. He said that consultation was defective because he was not provided with ‘all relevant information’ about the relevant changes, as required by clause 28.2 of the Award, and that the discussions had not covered all of the relevant issues. He said that the company did not make reasonable efforts to redeploy him and that he could have been redeployed to the team leader role because he was a suitable candidate.

Consideration

1. Pursuant to s 385 of the Act, a dismissal cannot be unfair if it was a case of ‘genuine redundancy’. This expression is defined in s 389 as follows:

“(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.”

1. I find that the company no longer required Mr Dlima’s job to be performed by anyone because of changes in the operational requirements of its enterprise. I accept the evidence of Mr Terranova about the financial position and operational requirements of the group and its members. He concluded that it was necessary to make savings, including in relation to labour. I find this conclusion to be entirely convincing. In particular, the evidence is very clear that in Mr Dlima’s team only 2 CROs were required. Mr Dlima disagrees with that assessment and says that PayPal had not yet commenced to source a second provider, and still has not done so. But this does not matter. The conclusion that only 2 CROs were required was one that was valid based on the levels of work that existed at the time. But even if the company’s assessment had been made on the assumption that the additional provider would be appointed, and that work would decline because of this, it was reasonable for the company to respond to this business risk in the way that it did. Moreover, even without these external changes in operational requirements, it is clear that the employer had another change in its operational requirements; this was the very fact that, whereas previously it considered that 4.5 FTE CRO positions were needed, it now required only two. Where an employer realises that it has too many workers doing a particular function, and that it can and should operate with fewer, this realisation is itself a change in the operational requirements (see Shachar v Electrical Home Aids Pty Ltd t/a Godfreys[2018] FWC 4892 at [27] – [30]). It is not necessary that there be some external factor. In the present case however there clearly was one, which in broad terms was the precarious financial position of the group.

1. Mr Dlima is wrong to say that his job is still needed and is still being done. Rather, the type of work that he used to do remains and is still being done, by the two CROs who remain in the PayPal team and who are actually needed. Mr Dlima’s role does not exist and is not needed. The company no longer wants any of the redundant jobs in the PayPal team to be done by anyone, because of changes in its operational requirements.

1. Mr Dlima said that there were other reasons for which the company dismissed him. I find that this was not the case. I reject Mr Dlima’s claim that there was some ulterior reason for his dismissal. The redundancy was not a sham. Nor was it related to his anti-bullying claim. He was selected for redundancy based on his ranking. The anti-bullying application was irrelevant to the question of whether he was redundant. There was no logical basis for the company to defer its decision until the Commission had decided the anti-bullying claim. The purpose of such a claim is to ensure that a person can continue to work without a risk to health and safety caused by bullying. It is not to ensure that the person’s employment continues. Further, there is no basis whatsoever for Mr Dlima’s suggestion that there was some kind of fraud in connection with his anti-bullying case and his dismissal.

1. I have considered whether the company may simply have wanted to get rid of Mr Dlima. He had a long list of grievances against the company. However, I find that RPS did not just want to get rid of him. The reason for his dismissal was the one given to him by the company. The evidence adduced by RPS about the reasons for Mr Dlima’s dismissal is clear, credible and convincing and I accept it. His job was not needed.

1. It is then necessary to consider whether the company complied with its consultation obligations under the Award in relation to the redundancy. Clause 28 of the Award requires an employer to consult with employees about major workplace change. Clause 28.1 states that where an employer has made a definite decision to make major changes in organisation, structure, or various other matters that are likely to have significant effects on employees (including termination), the employer must give notice of the changes to the employees who may be affected by them, and discuss the changes, their likely effect on employees, and measures to avoid or reduce the adverse effects on employees. Discussions are to commence as soon as practicable after a definite decision has been made. Clause 28.2 provides that for the purposes of the discussion, the employer must give the affected employees all relevant information about the changes in writing, including their nature and expected effect on employees.

1. I find that the company complied with these obligations. The discussions that occurred on 21 and 23 February 2024, and which otherwise took place by correspondence, met the requirements of clause 28. Mr Dlima was provided with relevant information in writing by Ms Kayani. He contends that not all relevant information was provided however I disagree. The discussions and written information clearly covered the required subject matter, including the nature of the change and its expected effects on Mr Dlima. Contrary to his contention, the company was not obliged under this clause to tell Mr Dlima that his team leader had been selected for redundancy.

1. I find that it would not have been reasonable in all the circumstances for Mr Dlima to be redeployed within the company or any of its associated entities. The only evidence of any available position or work that Mr Dlima might conceivably have done is the team leader position. I accept the evidence of Mr Offord that Mr Dlima was not suitable for this role. It was sensible and compelling. I find that Mr Dlima did not have the required qualifications and experience for the role of resolutions team leader and that reasonable retraining could not have rendered him suitable for the role. Mr Dlima said that he should have been able to apply for the position of the internal candidate who was successful in applying for the team leader role, but this position was absorbed by the relevant manager and no longer existed.

1. Mr Dlima contends that for various reasons his selection for redundancy was unfair. However, where redundancy involves the reduction of workers in a group, and the Commission is considering whether the redundancy was a ‘genuine’ one within the meaning of s 389, it is not relevant to inquire into the fairness of the selection process (see Yang v Telstra[2023] FWC 3319 at [16]). It would be relevant to a redundancy that did not fall within s 389, but had that been the case, I would nevertheless have considered Mr Dlima’s selection to have been a fair one. He did not score high enough to rank in the top two. The selection criteria were fair. The company’s reasons for not including ‘conversion rates’ in those criteria, as Mr Dlima would have liked, were reasonable as this was a less reliable indicator of performance. Finally, I find that Mr Dlima’s ranking was not affected by the access issues of which he complained.

1. Mr Dlima’s dismissal was a case of genuine redundancy. But irrespective of this question, I cannot identify any unfairness in this dismissal, having regard to s 387 or otherwise.

The company did not need Mr Dlima’s role to be undertaken by anyone. Whatever Mr Dlima might think about the matter, the business simply does not need 4.5 FTE CROs in its PayPal team because 2 CROs can do the job perfectly well. And there is no indication of any other work Mr Dlima could reasonably have done. Some 78 employees have been made redundant across the group. Finally, had the dismissal been unfair, which patently it was not, reinstatement would have been entirely inappropriate because Mr Dlima’s position no longer exists and there is no evidence of any available work he could now usefully do.

1. The application is dismissed.

DEPUTY PRESIDENT

Appearances:

J. Dlima for himself
J. Knoth for RPS

Hearing details:

2024
Melbourne
6 June

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