John Millar v Council on the Ageing WA Inc T/A Cota (WA) Inc
[2016] FWC 3073
•19 MAY 2016
| [2016] FWC 3073 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
John Millar
v
Council on the Ageing WA Inc T/A COTA (WA) Inc
(U2016/3909)
COMMISSIONER MCKENNA | SYDNEY, 19 MAY 2016 |
Application for relief from unfair dismissal.
[1] John Millar (“the applicant”) has made an application pursuant to s.394 of the Fair Work Act 2009 (“the Act”) seeking an unfair dismissal remedy. The applicant contended that his termination of employment was a harsh, unjust or unreasonable dismissal. The applicant seeks an order concerning a return to work or, in the alternative, an order for compensation. The Council on the Ageing WA T/A COTA (WA) Inc (“the respondent”) contends the termination of employment was a “genuine redundancy” within the meaning of s.389 of the Act and, for that reason, the application should be dismissed.
The applicant’s contentions – unfair dismissal
[2] The applicant considered that his termination of employment by the respondent constituted an unfair dismissal, rather than a genuine redundancy, for reasons including that:
• the applicant’s former job and/or the work to be performed continue, but is now undertaken by three new staff of the respondent albeit the contract with the relevant funding-Department concerning the provision of certain services was unchanged;
• the applicant was employed by the respondent on a three-year contract from 1 August 2014 until 30 June 2017, as a Community Education Officer - Seniors Housing Centre (with the result that the termination of his employment meant his contract was terminated before its term had concluded);
• the applicant considered the consultation process concerning the restructure which resulted in the termination of his employment was perfunctory, as no meaningful discussions took place;
• the applicant’s written submission to the respondent with his comments and recommendations concerning the then-proposed restructure, which the applicant considered were reasonable and appropriate, were not properly or reasonably considered by the respondent; and
• the positions that were created within the restructure were to the applicant’s disadvantage.
The respondent’s contentions – genuine redundancy
[3] The respondent contended that the termination of the applicant’s employment was a genuine redundancy that arose against the background of legitimate operational factors, which resulted in, among other outcomes, the abolition of the applicant’s Level 6 position. The respondent submitted that consultation requirements had been met. The respondent contended it had properly considered the matters raised by the applicant in its determination of the restructure it effected. Further, there were no positions to which the applicant reasonably could have been redeployed. In this regard, the respondent considered the applicant was unsuitable for direct appointment/redeployment to the higher-graded Level 7 position that was newly-created in the restructure; and the two newly-created Level 5 positions were also considered unsuitable for redeployment because they were part-time positions, with terms of pay and conditions inferior to the applicant’s full-time Level 6 position. In consequence of the abolition of the applicant’s Level 6 position in the restructure, and what the respondent considered to be the unsuitability of the Level 5 or Level 7 positions for redeployment (and the unavailability of any other positions), the applicant was given notice of termination of employment by reason of redundancy.
Background
[4] An agreed statement of facts was tendered, which addressed certain matters such as:
• the pre-restructure and post-restructure organisational charts;
• the respondent’s small business status;
• the industrial instrument applicable to the employment, namely the Social, Community, Home Care and Disability Services Industry Award 2010 (“the Award”);
• the roles the applicant had held over the period of his employment with the respondent;
• the correspondence that had been exchanged between the applicant and the respondent, relevantly including:
- correspondence from the respondent of 30 September 2015, advising the applicant of the proposed restructure and seeking his comment,
- correspondence from the applicant of 16 October 2015, responding to the respondent’s proposal of 30 September 2015,
- correspondence of 27 October 2015 from the respondent to the applicant advising the applicant of the outcome of the respondent’s considerations and deliberations, and inviting the applicant to apply for any positions before 20 November 2015,
- correspondence of 24 November 2015 from the respondent to the applicant advising that the applicant’s late applications for the newly-created positions would be accepted (and the applicant’s correspondence in reply on that same day advising he would not be applying for any positions),
- the respondent’s correspondence to the applicant advising of notice of termination of employment by reason of redundancy;
• financial information concerning the applicant’s weekly wages and payments made by the respondent to the applicant in connection with the termination of employment.
[5] By way of elaboration on the matters set out in the agreed statement of facts, the respondent is a small (presently four full-time and five part-time staff), not-for-profit/charitable peak organisation, which provides services and advocacy for seniors in Western Australia. While the respondent receives funding from a variety of sources, principally the WA Department of Commerce (“the Department”), it does not receive any on-going core funding. The provision by the respondent of services for seniors is limited by its funding and it currently faces a substantial financial deficit for the financial year ending 30 June 2016.
[6] The applicant initially had been employed by the respondent from 29 February 2012 as an Information Officer; he was re-contracted by the respondent as a Community Education Officer on 1 August 2014 at Level 6 under the Award. (The term of the applicant’s employment contract was cut short by the effect of the restructure, as its term was specified to run from 1 August 2014 to 30 June 2017 subject to the continuation of the respondent’s contract to deliver the Seniors Housing Centre in partnership with the Department of Commerce.)
[7] A review of the respondent’s organisation and management structures took place around 4 September 2015.
[8] On 24 September 2015, the respondent’s (then) CEO, Ken Marston, wrote to the Department setting out matters concerning its review of staffing arrangements and what it was considering. The CEO asked the Department to advise if it had any concerns or recommendations regarding the respondent’s proposals. (The Department did not send a written response to the CEO. The relevant officer of the Department subsequently advised the applicant in emailed correspondence - post-termination of employment - that he recalled having a telephone discussion in which he advised the CEO that he would have no comment on matters internal to the respondent and that any decisions about structure and staffing were a matter for the respondent.)
[9] On 30 September 2015, the respondent provided the applicant with correspondence advising him of the proposed restructure and seeking his comment. The correspondence read:
“Following a review of Seniors Housing Centre (SHS) operations, the Board has authorised me to consult staff regarding a proposed restructure of staffing arrangements.
The context of the review and proposed restructure are, briefly, that:
• The SHS contract with the Department of Commerce is a high priority for COTA WA providing a vital service to seniors in Western Australia.
• The Board seeks to build upon and leverage the successes of SHC that have been achieved since its inception in 2012 and continue to perform strongly to achieve or exceed contracted outcomes.
• The Board is taking a strategic approach to the long viability and service delivery of SHC and believes that this restructure will achieve that outcome and enhance our prospects of obtaining future funding to maintain and further develop the service.
• The Board seeks to adjust management roles and responsibilities within COTA WA through redistributing responsibilities in the context of CEO changeover.
It is proposed that:
• The existing two Community Education Officer positions currently designated at level 6 of the Social Home Care and Disability Services Award 2010 (MA000100) will become redundant.
• A level 7 Coordinator position is created with management responsibility for managing SHC functions including supervision of lower level positions and SHC volunteers. The Coordinator will be responsible to the CEO.
• Two 0.5 FTE Education Advisor positions are created at level 5 of the Award.
• A volunteer team is created.
Draft duty statements and existing proposed organisational charts are attached for your information.
Process
1. Consultation with SHC staff will occur in the period 30 September 2015 to October 20th, 2015. You are invited to submit your written comments and recommendations to me on the proposed restructure on October 19th, 2015. If you wish to discuss any aspects of the proposal in the interim, please do so with Chris Jeffery, acting CEO in my absence.
2. Your comments and recommendations will be considered and the Board will make a decision on the restructure. You will be advised as soon as practicable of the Board decision. I anticipate that this would be possible before October 23rd.
3. Should the Board elect to continue restructuring the SHC, the newly created positions will be advertised, and a selection process will occur. Your application for any of the positions that will be created will be welcome.
4. In order to facilitate a smooth transition to the new structure, the existing level 6 positions will not become redundant until the level 7 is appointed.
5. Should you be unsuccessful in applying for one of the new positions, you may be redeployed within COTA WA should a suitable vacancy be available.
6. If you are unsuccessful in applying for a new position in SHC and no suitable position is available for redeployment you will entitled to receive redundancy payments, additional leave to seek employment and all other benefits provided for in the Award.
7. Should you have any objections to this process our grievance procedures are available, and I invite you to contact our President, Judy Hogben, to discuss your concerns.”
[10] According to the applicant’s uncontested evidence, the document setting out the proposed restructure was given to him by the CEO shortly before the time the CEO was to depart on a period of leave. After quickly reading the document, the applicant stated to the CEO: “This is interesting”. The CEO then stated: “This is what we are thinking about doing, John, what do you think?”. The applicant next asked the CEO two questions. The first was whether he would be offered any of the (new) positions proposed in the restructure, and the CEO’s answer was in the negative. The second question the applicant asked the CEO was why he was not being offered any of the positions. The CEO answered the applicant’s second question with words to the effect that the respondent wanted to get the best people for the jobs and wanted to see who was out there in the marketplace.
[11] Again according to the applicant’s uncontested evidence, the applicant later approached Chris Jeffrey, the (then) Acting CEO - who advised the applicant that he did not know much more about matters other than what was in the correspondence of 30 September 2015 concerning the proposed restructure.
[12] It is common ground the applicant did not otherwise contact Judy Hogben, the respondent’s Board President, with any objections to, or grievances about, the process described in the correspondence of 30 September 2015.
[13] On 16 October 2015, the applicant responded with his own considered commentary on the proposals. Among other matters, the applicant’s response addressed his own personal circumstances as well as matters concerning the operations of the respondent - and concluded with his own alternative recommendations concerning the proposed restructure, namely:
“1. The Board put on hold the proposed restructure until a new Chief Executive is on board. At a more appropriate time that person, can review the SHC together with the Board.
2. Consult with Department of Commerce regarding expansion and/or changes to the SHC team following that appointment.
3. Prepare a feasibility plan to ensure that the expansion is warranted, will work and is costed.
4. The Board direct the new CEO to prioritise investigation and implementation of new income generating activities.”
[14] On 21 October 2015, the CEO wrote to the respondent’s President in relation to the applicant’s response concerning the proposed restructure. The CEO wrote that he considered the applicant had raised a number of matters which were “not germane to the issue” and he did not think that the applicant had raised any issues “that would dissuade us from undertaking or modifying the proposal”. The CEO then set out a range of other matters as to his recommendations concerning the detail of the steps that might follow.
[15] On 27 October 2015, the respondent sent the applicant advice as to the outcome of what the respondent had determined concerning the restructure. Shortly stated, the respondent’s correspondence of 27 October 2015 advised that the applicant’s comments in his response had been considered, but the proposed restructure would proceed as earlier outlined. The respondent’s correspondence advised the applicant he would be welcome to apply for the newly-created positions. Information about the timeline was provided in that regard, and the respondent attached duty statements for the new positions (one full-time Level 7 Coordinator of the Seniors Housing Centre; and two part-time Level 5 Education Advisor positions).
[16] The applications for the newly-created positions closed on 20 November 2015. The applicant did not submit any job applications for those positions.
[17] On 24 November 2015, the CEO advised the applicant he would accept a late application for any of the positions. Later that same day, the applicant confirmed he would not be applying for any of the new positions.
[18] On 7 December 2015, the CEO wrote to the applicant advising of the termination of his employment by reason of redundancy. The letter read, in part, that the respondent:
“… has recently undertaken a restructuring program that is designed to improve operational efficiencies of the organisation. The restructure program has included a review of the Seniors Housing Centre, and the positions that currently exist within this team. COTA has undertaken an assessment of the roles needed to support this restructure and unfortunately the role of Community Education Officer is no longer required.
COTA has explored suitable redeployment opportunities within the organisation as part of this restructure process. Unfortunately, we are unable to find a suitable role for you moving forward. As such, you position has now become redundant and your employment with COTA will terminate. …”
[19] The correspondence then set out the detail of notice, entitlements and the like. The applicant was retrenched with an effective date of 1 January 2016.
Consideration
[20] There are statutory provisions which arise in relation to matters to be determined concerning this application. That is, s.396 of the Act provides there are initial matters that must be decided before considering the merits of an application for an unfair dismissal remedy:
“396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.”
[21] Section 389 of the Act defines the meaning of “genuine redundancy” as follows:
“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.”
[22] If the dismissal was a case of genuine redundancy, it will not be an unfair dismissal because s.385 of the Act (relevantly) provides the following definition of “unfairly dismissed”:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[23] I turn now to certain matters arising from the evidence and submissions, as to the threshold question of “genuine redundancy” as conditioned by the meaning in the Act.
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
[24] I am satisfied the respondent no longer required the applicant’s Level 6 job to be performed by anyone because of changes in the operational requirements of the respondent’s enterprise. That is, there were changes in the operational requirements of the respondent’s enterprise, which came about against the background of the matters described in the respondent’s materials – relevantly including its wish to reconfigure its small staffing base with the creation of a new full-time Level 7 position and two part-time Level 5 positions. There was nothing to indicate that these changes were proposed and then implemented for any reasons other than those described by the respondent.
[25] I accept that the respondent determined, for the reasons it described, to effect the changes it did after having given notice in the correspondence of 30 September 2015 of what it was then proposing, and inviting comment. The applicant advanced various matters to the respondent with his proposals and recommendations which differed from those in the correspondence of 30 September 2015. The respondent was not persuaded to adopt the approach for which the applicant advocated.
[26] The applicant submitted before the Commission that, for a range of reasons, his job still needed to be performed (and needs to be performed pursuant to contractual arrangements with the Department). I have considered those parts of the applicant’s case which were to the effect that, for instance, aspects of the applicant’s former job, as a collection of functions, duties and responsibilities, necessarily contractually remained to be performed by someone within the employ of the respondent and that part of the post-restructure Level 7 work still essentially had to contain part of the applicant’s Level 6 role. While it seems to be common ground that certain aspects of the job formerly undertaken by the applicant were subsumed in the position created following the organisational review, the new positions had a blended configuration of tasks the applicant formerly performed as well as other responsibilities.
[27] While one can feel sympathetic about the applicant’s own consideration of matters, I am satisfied, and so conclude, the respondent no longer required the applicant’s job (at least as it was constituted before the organisational review) to be performed by anyone because of changes in the operational requirements of its enterprise.
Whether the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
[28] It is common ground the Award applied to the employment relationship between the applicant and the respondent. The respondent contended it had complied with its consultation obligations in the Award. The relevant provisions of clause 8 of the Award (Consultation regarding major workplace change) read:
“(a) Employer to notify
(i) 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.
(ii) 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.
(b) Employer to discuss change
(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), 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.
(ii) 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(a).
(iii) 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.”
[29] It is clear that the respondent provided the type of written information described in the consultation clause of the Award. It is less-clear that the discussions concerning the change had occurred, or occurred in a way that the Award otherwise contemplates.
[30] The evidence was that the applicant spoke briefly to the CEO when he was provided the restructuring proposal of 30 September 2015. There is nothing, however, to indicate the applicant could not have had a fuller discussion with the CEO at that time (except, perhaps, as a result of the fact that he had only then just briefly read the document). The applicant asked the CEO only two questions - each concerned solely with, firstly, whether he would be given any of the jobs that would be created under the proposed restructure; and, secondly, if not, why not. The applicant’s evidence was that his subsequent discussion with the Acting CEO did not yield much information, because of the Acting CEO’s advice that he did not know much more than was otherwise set out in the correspondence of 30 September 2015. There was no evidence as to what the applicant actually discussed with the Acting CEO in that regard; and, it must be observed, the proposal set out in the correspondence of 30 September 2015 was reasonably detailed and otherwise reasonably self-explanatory.
[31] The applicant submitted that any consideration of what he had advanced in his written response as an alternative to the respondent’s proposal was merely perfunctory, and that the decision had already been made and likely would not have been changed regardless of what he may have advanced in discussions. In this regard, I have considered the content of the CEO’s correspondence of 21 October 2015, which appears to convey that the respondent had been open to persuasion about modifying the proposal, but, in the end, had not been persuaded.
Whether it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer.
[32] The applicant’s case seemed to be advanced, at least in part, on the premise that, considering all the circumstances, the applicant would have been an appropriate person to be directly appointed and/or redeployed to the new Level 7 position. For his part, the applicant considered it was “a big surprise” that he was not offered the Level 7 position (e.g. by way of direct appointment and/or redeployment as part of the restructure), given matters including, but not limited to, his past employment history and qualifications that he considered would have made him suitable for that role.
[33] While the applicant considered that for reasons including fairness and merit, he should have been directly appointed or redeployed to the new Level 7 position, the respondent did not consider the applicant to be suitable for direct appointment/redeployment to the Level 7 position as part of the proposed restructure. The respondent determined to advertise the newly-created positions (and the applicant did not apply for them).
[34] There was no contest at all in the respondent’s case to the applicant’s descriptions of himself as a well-regarded and professional employee. Moreover, in earlier instances where term contractual arrangements between the applicant and the respondent had come to an end by the passage of time, the applicant had continued to be employed or had been re-employed by the respondent. Thus, there was nothing arising in the case to suggest, for example, that there were any issues about the applicant’s performance (or any other issues) in his Level 6 role such that the termination of employment might have been considered to be an unfair dismissal improperly effected in the guise of a redundancy.
[35] The applicant determined not apply for the Level 7 position in the later open, competitive selection process because his “intuition and perception” was that he would not get the job (and the applicant’s impressions in that regard, he noted in the proceedings, were reinforced by the respondent’s materials advanced in these proceedings - and thereby his intuition and perception were most likely correctly-based). While it came as a surprise to the applicant that the respondent did not directly appoint or redeploy him to the newly-created Level 7 position - and this observation is made without any disrespect to the applicant - an employee could not ordinarily or typically expect that he or she would necessarily receive a promotion in a restructure, even though it is sometimes the case that an employee is promoted in such circumstances.
[36] The respondent described its grounds, which I accept, as to why the applicant’s direct appointment and/or redeployment to the newly-created, higher-graded Level 7 position would not have been reasonable in all the circumstances – albeit the applicant, not unnaturally, has his own and different view about that.
[37] It is common ground that neither the applicant nor the respondent considered the part-time Level 5 positions would have been suitable redeployment options within the respondent’s enterprise, given the inferior pay and conditions.
[38] Given the very small size of the respondent’s operations, there were no other available redeployment options consequent upon the restructure.
[39] Lastly, there was no evidence of any associated entities of the respondent for any other redeployment options.
Conclusion
[40] The case advanced by the applicant went to matters which he considered quite unfair about what had transpired – and there may well be some suasion in relation to such matters when considering a broader context, including the applicant’s own personal circumstances (reasonable proximity to what he anticipated may have been his pending retirement from the workforce) and the term-specified expectation of the period of his employment contract with the respondent. However, given my acceptance of the respondent’s contention the termination of employment constituted a genuine redundancy within the meaning of the Act, it is unnecessary or inappropriate to further consider such matters given my conclusion concerning the initial matter. As such, an order dismissing the application will issue in conjunction with these reasons.
COMMISSIONER
Appearances:
J. Millar in person.
K. Hodge for the respondent.
Hearing details:
2016.
Perth;
26 April.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR580399>
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