John Neville v Orica Australia Pty Ltd
[2009] FWA 321
•29 SEPTEMBER 2009
[2009] FWA 321 |
|
DECISION |
Workplace Relations Act 1996
s.643—Termination of employment
v
Orica Australia Pty Ltd
(U2009/10193)
COMMISSIONER LARKIN | SYDNEY, 29 SEPTEMBER 2009 |
Termination of employment – operational reasons.
[1] This matter concerns a jurisdictional objection raised by Orica Australia Pty Ltd (Orica) pursuant to s.645 of the Workplace Relations Act 1996 (the Act) on the grounds that the termination of employment of Mr Neville was for genuine operational reasons or for reasons that include genuine operational reasons (s.643(8)).
[2] Mr Neville lodged an application with Fair Work Australia on 8 July 2009, pursuant to s.643(1) of the Act, alleging that his termination of employment by Orica on 30 June 2009 was harsh, unjust or unreasonable (s.643(1)(a)) and unlawful (s.659(2)(e)). In his application Mr Neville stated that he was employed by Orica as a permanent employee for approximately nine years and that the company terminated his employment alleging that his position had been made redundant. Mr Neville disputed this contention. He stated that he had recently been afforded a supervisory role in addition to his shot firing role and in his view neither position had been made redundant. Mr Neville believed that he had been specifically targeted by the company due to his association with, membership of and activities on behalf of the Transport Workers’ Union (TWU).
[3] On 20 July 2009 Orica filed Form R29, notice of motion to dismiss the application for want of jurisdiction, on the grounds of genuine operational reasons. The notice of motion was listed for hearing in Toronto on 1 September 2009.
[4] On 1 September 2009 Orica was represented with the permission of Fair Work Australia by Mr Copeland, solicitor. Mr Neville was represented by Mr McIntosh of the TWU.
THE EVIDENCE
[5] The following persons gave both oral and written evidence during the proceedings.
Mr Gorfine 1 Field Operations Manager, Orica Mining Services, South East Region.
Mr Russell 2 Operations Superintendent, Orica Mining Services, Hunter Valley.
Mr Neville 3 Applicant in the substantive application.
THE EVIDENCE
[6] In his witness statement, Mr Gorfine stated that part of his responsibilities as Field Operations Manager was the staffing numbers of shotfirers in the South East Region, which incorporated the Hunter Valley. He stated that in late 2008 Orica introduced a cost reduction program across its Australian and New Zealand Mining Services business due to the deteriorating economic climate. In February 2009 he and other managers were directed, by the General Manager, to achieve a 10 percent reduction in headcount across their respective regions by September 2009. In response to that direction one office position was made redundant in March 2009 and in May 2009 an operator position in western New South Wales was also made redundant. Mr Gorfine stated that he was still required to achieve a larger reduction in headcount.
[7] In relation to Mr Neville’s position being made redundant, Mr Gorfine stated that in April 2009 Orica acquired a short-term contract to provide services to the Drayton coal mine in the Hunter Valley, which required one operator and three shotfirers. That contract ceased on or about 26 June 2009 and the four positions at Drayton became redundant. Three of the four Orica employees were redeployed; however, there were no suitable positions available for Mr Neville. Mr Gorfine stated that he consulted with Mr Russell and authorised him to terminate Mr Neville’s employment “because of the redundancy of Mr Neville’s position at Drayton and the direction to me from Orica’s General Manager to reduced (sic) headcount”. 4
[8] Mr Gorfine stated that on 29 June 2009 Orica’s Human Resources Manager for South East Australia advised the TWU that two positions were to be made redundant the following day. Mr Gorfine stated that he advised the head union delegate of the same. The positions were Mr Neville’s shotfirer position and the Hunter Valley Fleet Coordinator position. On 30 June 2009 Mr Gorfine, with Mr Russell and the South East & NZ Business Manager, met with Mr Neville, with the head union delegate connected by telephone, and explained the operational reasons for Mr Neville’s termination of employment.
[9] In reply to Mr Neville’s substantive application, Mr Gorfine stated:
“I have read the assertion by Mr Neville at clause 3 of Schedule A of his Application that he had ‘recently been afforded a supervisory role in addition to his shot firing role’. During the Drayton Total Load Service, and at a previous customer site (Glendell), Mr Neville worked as the head shotfirer, but reported to a site Supervisor during these jobs. At Drayton, the Supervisor was Neil Scholes. Notwithstanding that the role of head shotfirer involved some supervisory duties, all roles and positions at the Drayton Total Load Service were no longer required upon the expiration of the Total Load Service contract.
In relation to Mr Neville’s assertion that ‘neither position has been made redundant’, I repeat that Mr Neville’s position of (head) shotfirer was made redundant.
Orica made Mr Neville’s position redundant for the genuine operational reasons stated in clause 10 above and these were the reasons why his employment was terminated.” 5
[10] Mr Neville, in his witness statement, stated that he commenced employment with Orica approximately January 2001 as a shotfirer and operator. He stated that he was often required to go to smaller, newer sites to deliver the services required by customers. He stated that Orica had a number of larger sites which were long term and ongoing.
[11] Mr Neville outlined the particular contracts/jobs he worked on. He stated that in approximately March 2008 volunteers were sought for a short term project, the Glendell contract, with assurances from Mr Russell of a return to the same site once the contract had been completed. He stated that he volunteered for the Glendell contract, which continued for approximately one year until February 2009, whereby he returned to Mt Owen, which was an Orica long term contract site. He stated that, for reasons that were not made clear to him, he was not allowed onsite at Mt Owen. Mr Neville stated that at this time Mr Russell sought volunteers for a short term contract at Drayton and that Mr Russell had again said words to the effect that no one would be left out on a limb if they volunteered to take the job. He stated that, due to the assurances of job security, he and others from the Glendell contract volunteered for Drayton and that he, Mr Neville, was asked to lead the team. He stated that the Drayton contract finished early and that, shortly after returning to Mt Owen, the team were requested to return to Drayton “for an unknown period of time starting in or around late April. With Mr Russell making the same assurances as he had in relation to the first mime at Drayton, I again volunteered to lead a team comprising three other guys who volunteered”. 6
[12] Mr Neville stated:
“During a period of 2-3 weeks we had to get set up for the second Drayton Orica contract. Mr Shane Russell asked if I could put down on paper what I did in order to prepare for such new, short term sites as a shot firer and I took this as recognition of my good work. As such I felt as though I was well equipped to take on the job. He also asked me to look at what the requirements for the light vehicle fleet used on the mine site for shot firers were and where Orica could save money. Again I took this as recognition of my good work and knowledge in this area.
Upon completion, Mr Russell was very pleased with the final draft of my plan. After I had shown him the results of the light vehicle spread sheets he asked if I could do the same with the heavy vehicles, which I did. Again he was pleased with my results.” 7
[13] Mr Neville stated that in late June 2009 his work at Drayton had been completed and he went to work at Liddell “where I had been scheduled to work by Mr Shane Russell as Rio Tinto had asked for additional resources. With one of our team being suspended for DUI and another being warned off site, Liddell was short of operators and as such I was required to work as an operator”. 8 He stated that after completing the Rio Tinto induction he worked as an operator driving trucks on site at Liddell.
[14] He stated that on 30 June 2009, which was towards the end of the first week working at Liddell, he received a text message to report to the Orica office. He stated that in the meeting with Mr Russell, Mr Gorfine, Mr Pereira and his union delegate he was told that he was being made redundant. Mr Neville stated that he was shocked given:
- the assurances from Mr Russell;
- there was plenty of work that he was doing at Liddell;
- the three other guys from the Drayton contract continued to work for Orica, other employees who didn’t have a license and couldn’t drive as operators were still working at Liddell and he was made redundant ahead of these guys;
- no other shot firers or operators in the valley were made redundant;
- ordinarily, Orica sought voluntary redundancies, which did not happen on this occasion, or ask people to take leave if they are under pressure.
[15] In his statement, Mr Neville outlined a number of reasons, which he stated were possibly the real reasons for his termination of employment.
[16] Mr Russell, in his witness statement, replied to a number of statements made by Mr Neville in his statement. He stated that Mr Neville, in the previous two years, had worked at Mt Owen, Glendell, twice at Drayton and at Liddell. He stated that it was not correct that Mr Neville was to go back to Liddell after the Drayton contract had finished. He stated that Mr Neville had been appointed to the position of operator/shotfirer at the Mt Owen site effective 19 February 2007, as outlined in the offer dated 16 February 2007. 9 Mr Neville had volunteered for a short term contract at Glendell, which ran from April 2008 to early January 2009. He then volunteered for a short term contract at Drayton, which commenced approximately 15 January to mid February 2009. Mr Russell stated:
“Mr Neville was to return to his appointed role at Mt Owen. However the mine operator, Thiess Mt Owen, refused to allow him access to their site. Mr Neville’s comment at paragraph 5 of his Statement that the reasons for Thiess denying him access ‘were never made clear’ is untrue. I and my supervisor, Jason Gorfine had discussed Thiess’ reasons with Mr Neville and I notified Mr Neville of these reasons in a letter to him dated 1 June 2009 (see Attachment 2).” 10
[17] The denial of access to Mt Owen, Mr Russell stated, did not occur until after the first Drayton contract, on 12 March 2009. Mr Russell stated that due to the ban from the Mt Owen site, which was Mr Neville’s permanent role, special project tasks were found for him pending an alternative shotfirer/operator position becoming available. Mr Russell stated that the assignment of these tasks were not so much as recognition of his good work, as he had stated in his witness statement, but because there were no operator/shotfirer positions available. Mr Russell stated that he organised a one day Coal and Allied generic induction on 25 March 2009 in anticipation of future work arising at any Rio Tinto site.
[18] Mr Russell stated that in late April 2009 another short term contract became available at Drayton and he offered the position to Mr Neville, which he accepted. Mr Russell denied Mr Neville’s statement that he, Mr Russell, had made assurances; “as I had in relation to his earlier role at Drayton I say because of the management direction to reduce headcount, I gave no such ‘assurances’. If asked by operators about job security, the only response I gave was that I was trying to keep everyone in a job, and that those in contracted positions that were specifically paid for by customers may not be affected”. 11
[19] The second Drayton contract finished approximately 24 June 2009. Mr Russell stated:
“During these final weeks I discussed with my supervisor, Jason Gorfine, how we could redeploy the 4 Orica employees once the Drayton contract finished. We knew that if we could not justify the redeployments, the management direction required us to reduce headcount.
Mr Gorfine and I identified 4 redeployment opportunities, as follows:
a. 2 x shotfirer/operators at Mt Owen;
b. 1 x temporary position of relief operator at Bayswater, to cover peak annual leave requirements; and
c. 1 x possible temporary duties for a 6th Mobile Manufacturing Unit (MMU) operator at Liddell on 30 June 2009, pending the re-instatement of the drivers licence of permanent Liddell operator, (name omitted). Liddell’s practice was to utilise a 6th MMU operator on an ad hoc, short term basis, previous requests in 2009 having been made for 27-29/4, 2/5 and 16/6.
Mr Neville was still banned from accessing the Thiess mine at Mt Owen, so was not considered for the Mt Owen positions.
In relation to the temporary Bayswater position, Mr Gorfine instructed me to assess the relative merits of Mr Neville and the other employee for this position. Mr Neville did not rate as highly as the other employee and the position was filled by the other ex-Drayton surplus operator.
There were no other positions available so Mr Gorfine and I decided to utilise Mr Neville for temporary 6th MMU operator duties at Liddell on 30 June 2009.
Since the second Drayton contract ceased on Tuesday 24 June 2009, and the temporary duties at Liddell were not until Tuesday 30 June 2009, I essentially had Mr Neville fill in time from Wednesday 25 to Friday 27 June by returning vehicles and magazine transfers.
Mr Neville did a site familiarisation at Liddell on Monday 29 June 2009, and worked as an operator on Tuesday 30 June 2009. There were no continuing duties for Mr Neville at Liddell after 30 June 2009 because permanent Liddell operator/shotfirer (name omitted), who had lost his drivers’ licence for drink driving, was having his license reinstated on 1 July 2009 and resumed his previous Liddell operator duties. Mr Neville’s comment at paragraph 17 of his statement, that there was ‘plenty of work’ that he was doing at Liddell, was work that was then able to be performed, and in fact has been performed by permanent Liddell operator/shotfirer (name omitted) from July 1, 2009.” 12
SUBMISSIONS
On behalf of Orica
[20] It was submitted on behalf of Orica that Mr Neville’s termination of employment was for genuine operational reasons. It was submitted that, on authority, 13 it was necessary to examine the operational reasons relied upon by Orica and to decide whether those reasons were genuine.
[21] The decision to terminate Mr Neville’s employment, it was submitted, was made by Mr Gorfine for the reasons that Mr Neville’s shot firer position at Drayton Coal Mine was redundant due to the expiry of the Drayton contract, and that Mr Gorfine had been directed by the General Manager to reduce headcount. It was argued that reasons of the redundancy of the position and a direction from senior management to reduce headcount fell within the definition of operational reasons in ss.643(9) of the Act.
[22] It was argued that Mr Neville’s assertions of Orica not following previous practice of offering voluntary redundancies and that he had been targeted on account of his association with the TWU were issues relating to the concepts of harsh, unjust or unreasonable and not relevant to the current proceedings. 14
On behalf of Mr Neville
[23] It was submitted on behalf of Mr Neville that, for the motion to succeed, the termination must be for an economic, technological or structural reason “and this has to be the genuine reason for his termination”. 15It was submitted that the operational reasons advanced by Orica for the termination were not genuine operational reasons. It was submitted that Orica’s contentions that the termination was due to the redundancy of Mr Neville’s shot firer position at Drayton and that Orica’s General Manager had issued a direction to reduce headcount were not operational reasons as defined by the Act as they had no factual, objective basis.
[24] The Drayton contract, it was argued, was always intended to be a short term contract, which Mr Neville had volunteered to work on, and not his normal position of performing work at either Liddell and/or Mt Owen. It was submitted that:
“It is simply erroneous to suggest that the applicant’s position became redundant because a short term contract which the applicant volunteered to work on was completed. There was no structural change to the respondent’s business in this sense, and in fact the applicant worked at Liddell once the respondent’s short term Drayton contract had finished, having to physically stop the work he was performing in order to attend the meeting making him redundant.” 16
[25] The Orica business structure, it was argued, involved permanent shotfirers and operators performing work on long term contracts and when additional work on smaller contracts arose Orica would transfer some of these employees to those contracts and when the work was completed the employees would return to one of Orica’s two long term contracts.
[26] The TWU disputed the genuineness of the second reason advanced by Orica for Mr Neville’s termination of employment. The TWU referred to the correspondence of Orica’s General Manager 17 and submitted:
“In the first letter dated March 2009 from General Manager Mark Thomas that the respondent relies on, he refers to specific challenges facing the business and the fact that he anticipates by the end of March 70 redundancies will need to be made.
Even if this is accepted as an ‘genuine operational reason’, Mr Thomas’ second letter dated 30 March 2009 refers to the fact that nearly all these people have made a transition to outside life which seems to suggest that everyone being made redundant has been informed and that most of these people have already left the employ of the respondent. Further, this letter seems to give an optimistic view of the respondent’s prospects into the future and doesn’t identify any specific challenge to the business requiring any further redundancies to be made. It therefore appears that by the end of March 2009 all structural redundancies had been made by the respondent.” 18
[27] It was submitted that in the Hunter Valley no operator or shotfirer had been terminated, with the exception of Mr Neville. All redundancies, it was argued, were limited to backroom employees. It was submitted that there were approximately 20 shotfirers and approximately 85 operators employed in the Hunter Valley and Mr Neville was the only employee made redundant.
[28] It was contended that Mr Gorfine did not consult Mr Neville’s manager, Mr Russell, prior to the day of termination of Mr Neville’s employment.
[29] It was submitted that the timing of Mr Neville’s termination suggest that it was not genuine in the “‘real, true or authentic and not counterfeit’ sense” 19. It was argued that approximately 70 redundancies were made in March 2009 and the process appeared to have been completed by the end of March 2009. Mr Neville, it was submitted, completed work on a short term contract at Drayton and then volunteered to complete another short term project at Drayton in late April 2009, which, it was argued, suggested availability of work for Mr Neville in spite of the state of the industry. The Drayton contract was completed in late June 2009 and Mr Neville “returned to work as an operator at Liddell where he was always scheduled to work had he not volunteered for the respondent’s short term Drayton work”20. Mr Neville had been inducted into the Liddell site and begun work as an operator when called to the office and terminated on 30 June 2009, “the final day available for the respondent to make an employee redundant under the legislation that existed at the time”.21
[30] It was submitted that there was no evidence to suggest that the work performed by Mr Neville no longer existed. The Drayton contracts, it was argued, was evidence of the fact that business was actually good. It was submitted that, while the economic climate may have appeared uncertain, there was no evidence that the work Mr Neville performed was ceasing. It was argued that Mr Gorfine’s evidence that he had to reduce headcount did not assist in identifying the reasons for Mr Neville’s termination of employment.
[31] It was argued that Orica had not provided the evidence to establish that the termination of Mr Neville’s employment was for a genuine operational reason. Therefore, it was submitted, the real reasons for Mr Neville’s termination could be examined. On this point, it was argued, the following matters should be considered when assessing whether Mr Neville’s termination was for genuine operational reasons:
- Mr Neville’s evidence of a prior dispute with Mr Gorfine when he, Mr Neville, was a union delegate.
- Mr Neville not being allowed onto the Mt Owen site, one of Orica’s longer term contract sites, and not being given reasons despite his complaints to Mr Gorfine and Mr Russell.
- Mr Neville was an agitator for safe work practices, which may have caused issues in his work relationship.
Reply on behalf of Orica
[32] In reply, it was submitted that on the evidence the work for Mr Neville at Liddell did not extend past 30 June 2009 and Mr Neville was denied access to Mt Owen.
[33] It was submitted that the submissions made on behalf of Mr Neville, in relation to all structural redundancies being completed by the end of March 2009, ignored Mr Gorfine’s evidence that he was acting under the General Manager’s direction of achieving a 10 percent reduction in headcount across the respective regions by September 2009.
[34] In relation to the submission of the timing of Mr Neville’s termination of employment, it was submitted that “[a]ny ‘coincidence’ arises from the fact that permanent Liddell operator, (name omitted), had his licence (and therefore operator duties) reinstated at Liddell on 1 July 2009”. 22 It was argued that the work at Liddell was performed by the permanent Liddell operator following the reinstatement of his licence on 1 July 2009.
CONSIDERATIONS
[35] As stated earlier in this decision, Mr Neville has applied to Fair Work Australia, for relief in respect to his termination of employment on 30 June 2009 by Orica, pursuant to s.643(1)(a) and s.659(2)(e) of the Act. Orica moves for the dismissal of Mr Neville’s application on the grounds that the termination was for genuine operational reasons or for reasons that include genuine operational reasons.
[36] The relevant sections of the Act are s.643(8) and s.643(9) as follows:
“(8) An application under subsection (1) must not be made on the ground referred to in paragraph (1)(a), or on grounds that include that ground, if the employee’s employment was terminated for genuine operational reasons or for reasons that include genuine operational reasons.
(9) For the purposes of subsection (8), operational reasons are reasons of an economic, technological, structural or similar nature relating to the employer’s undertaking, establishment, service or business, or to a part of the employer’s undertaking, establishment, service or business.”
[37] For present purposes, s.649 states:
“649 Dismissal of application relating to termination for operational reasons
(1) If:
(a) an application is made, or is purported to have been made, under subsection 643(1):
(i) on the ground referred to in paragraph 643(1)(a); or
(ii) on grounds that include that ground; and
(b) either:
(i) the respondent has moved for the dismissal of the application on the ground that the application is outside the jurisdiction of the Commission because the employee’s employment was terminated for genuine operational reasons or for reasons that include genuine operational reasons; or
(ii) it appears to the Commission, on the face of all the materials before it, that the employee’s employment may have been terminated for genuine operational reasons or for reasons that include genuine operational reasons;
the Commission must hold a hearing to deal with the operational reasons issue before taking any further action in relation to the application, other than dealing with a matter on the papers as provided by section 645, 646, 647 or 648.
(2) If, as a result of the hearing, the Commission is satisfied that the operational reasons relied on by the respondent were genuine, the Commission must:
(a) if subparagraph (1)(a)(i) applies—make an order dismissing the application; or
(b) if subparagraph (1)(a)(ii) applies—make an order dismissing the application to the extent that it is made on the ground referred to in paragraph 643(1)(a).
(3) Subject to any right of appeal to a Full Bench of the Commission, a finding by the Commission that it is not satisfied that the operational reasons relied on by the respondent were genuine is final and binding between the parties in any proceedings before the Commission.”
[38] In A Cruickshank v Priceline Pty Ltd 23(Priceline)the Full Bench considered the requirements of s.649 and stated:
“Where the procedure in s.649 applies, therefore, the question is whether the Commission is “satisfied” that any operational reasons advanced by the employer for the termination are genuine reasons. While there is no presumption to the contrary, unless the employer produces evidence of the reasons for the termination and persuades the Commission they are or include genuine operational reasons, the jurisdictional objection will fail. Questions of onus may arise but they are unlikely to play a large part in the decision-making process. The question ultimately is whether the Commission is satisfied, on the evidence and material presented to it by the parties, that there were genuine operational reasons.
Speaking generally the reasons for termination of employment are the reasons of the decision-maker. In many cases the decision-maker will be easily identifiable. In other cases the situation may not be straight forward. For example the decision may have been taken by a group such as a committee. In any event the evidence of the decision-maker, or decision-makers if there are more than one, will be pivotal.” 24 (citations omitted)
[39] If I am satisfied that the operational reasons relied on by Orica for the termination of Mr Neville’s employment were genuine, then I must make an order under s.649(2)(b) dismissing Mr Neville’s application for relief to the extent that the application relied upon the grounds under s.643(1)(a) of the Act. Further, the evidence of Mr Gorfine, the decision maker, is “pivotal” to my satisfaction that there were genuine operational reasons for the termination of Mr Neville’s employment with Orica.
[40] The Full Bench in Priceline outlined the approach to be taken in considering the test required by ss.643(8) and (9) as follows:
“It is clear that there were conflicts in the evidence which required to be resolved by the exercise of judgment and by the apportionment of relative weight to the evidence and material before the Commission. While the Commissioner made some findings he made no intermediate findings. He moved directly to the overall conclusion that the termination of employment was not a sham and that the appellant was not targeted inappropriately. Assuming that the Commissioner decided to accept Mr Stapleton’s evidence, despite the contrary indications to which we have referred, the appellant was entitled to know why. Furthermore, in the absence of intermediate findings we are unable to be confident that the Commissioner approached the application of the test in ss.643(8) and (9) in the correct way. It is accepted that the decision of the Full Bench in Village Cinemas properly sets out the nature of that test, but it is not clear that the Commissioner in fact applied it. Whether or not a termination of employment is for genuine operational reasons, or for reasons which include such reasons, is to be ascertained by an examination of the reasons for the termination of employment in question, rather than by identifying a generalised operational need to reduce employment.” 25 (citations omitted)
[41] The Full Bench in Village Cinemas Australia Pty Ltd v Carter 26(Village Cinemas) considered s.643(8) of the Act and stated:
“We agree with Mr Ginnane that the operational reason relied upon by the employer need only be a ground or cause for the termination of the employment of an employee. It need not be something that demands or brings about an obligation to terminate the employment of a particular employee. The termination of employment of the particular employee does not have to be an unavoidable consequence of the operational reason for the limitation in s.643(8) to operate. Consequently, whether the employer could have done something other than terminating the employee’s employment will generally be irrelevant in deciding whether the termination was for genuine operational reasons, or reasons that include genuine operational reasons. To pose the question whether the termination was “a logical response to” the employer’s operational requirements will also not necessarily assist in determining whether the termination was for genuine operational reasons. This may also be an appropriate question to pose in a consideration as to whether or not the operational reason advanced by the employer for the termination of employment of the particular employee was a sham or not. However, that question does not arise in this application.” 27 (citations omitted)
[42] Further in the decision, the Full Bench stated:
“An applicant for relief bears the onus of proving all the elements necessary to establish his claim. This includes satisfying the Commission that it has jurisdiction to deal with the matter. Where, as in this case, the respondent asserts that the application is precluded by operation of s.643(8), the respondent bears the evidentiary onus of persuading the Commission that the termination of employment of a particular employee was for genuine operational reasons or for reasons that include genuine operational reasons. It is in that context that a mere assertion by an employer to that effect will usually not be sufficient to discharge the evidentiary onus. What evidence will suffice will vary from case to case depending on the circumstances.” 28
[43] On authority, I must be satisfied, on the evidence and material presented, that there were genuine operational reasons for the termination of Mr Neville’s employment. Orica is required to produce the evidence to persuade me that Mr Neville’s termination of employment was for genuine operational reasons.
[44] The Full Bench in Boeing Australia Limited v B Acworth 29 (Boeing) outlined the approach to be taken in the exercise required by s.649(2) of the Act as follows:
“When a respondent employer moves for the dismissal of an application pursuant to s.649(1)(b)(i), s.649(2) requires the Commission to examine the operational reasons relied on by the respondent employer and to decide whether those reasons were genuine. It follows that the focus of the inquiry is two-fold. It requires the identification of the reasons relied upon by the employer and an evaluation of their genuineness. In a forensic sense reasons relied on by the employer might not be genuine because they were not real reasons for the termination or, while being genuine reasons, they may not be operational ones.” 30
[45] As was said in Boeing “the employer’s reasons for dismissal are the critical consideration”. 31The employer’s reasons for the termination are those advanced by the decision maker and/or decision-makers, if more than one. On authority, I must first identify the reasons relied upon by the employer and then evaluate those reasons for genuineness.
[46] Mr Gorfine, as the decision maker in this case, outlined his reasons in his witness statement as follows:
“On 21 February 2009 I and other managers were directed by the General Manager of Orica Mining Services Australia Asia, Mark Thomas, to achieve a 10% reduction in January 2009 headcount across our respective regions by September 2009.
…
On or about 27 April 2009 Orica was awarded a short-term contract to provide a ‘Total Load Service’ to Drayton coal mine in the Hunter Valley. This contract required 4 Orica employees, one operator and three shotfirers. The Applicant, Mr Neville, performed a shotfirer position.
This contract ceased on or about 26 June 2009, and the four roles at Drayton became redundant. Orica obtained redeployment for three of the four displaced Orica employees into other available, suitable positions within the South East Region. However there was no suitable position, including any shotfirer or operator position, available for Mr Neville.” 32
[47] I am satisfied on the material before me that the operational reasons relied upon by Orica were genuine. In my view, Orica has satisfied the evidentiary burden of persuading me that Mr Neville’s termination was for genuine operational reasons or for reasons that include genuine operational reasons and not a sham. My reasoning for this conclusion follows.
[48] It is correct to say, as Mr McIntosh submitted, that Orica Mining Services operate their business on the basis of set long term contracts and on the basis of short term contracts and employees were transferred between the two types of contracts. As the TWU put the argument:
“It also reiterates that the system Orica applied was the transfer of employees from long term back to short term back to long term contracts and that therefore at the end of the Drayton contract operational reason to terminate Mr Neville’s employment.” 33
[49] Simply because Orica’s system of operation involved the transfer of employees between long and short term contracts does not mean that positions are not made redundant for operational reasons and that those operational reasons cannot be genuine.
[50] The General Manager of Orica Mining Services Australia Asia, Mr Thomas, on 21 February 2009 directed his management team “to look at their respective operations or cost centres and develop a plan to reduce the cost base by a minimum of 10 percent between now and the end of the year. To be clear I am asking you to achieve a minimum of a 10 percent reduction in monthly CFC beginning in April of this year”. 34 Mr Gorfine, in evidence under cross examination, acknowledged that his area of responsibility was doing better than other areas of the business,35 however, the business did not isolate the Hunter Valley area from other areas of the business.36 I accept Mr Gorfine’s evidence on this point. The direction issued by the General Manager to reduce costs by a minimum of 10 percent did not, in my opinion, isolate the Hunter Valley operations from that exercise.
[51] Mr Gorfine held discussions with Mr Russell, from at least March 2009, in relation to the business situation and head count. In reply to Mr McIntosh’s questions in relation to short-term contracts and Mr Neville’s redundancy, Mr Gorfine gave the following evidence:
“By the same token, there was also some other work planed (sic) which we were hoping actually John and – and the other – the rest of the team that had done the Glendale work, we were hoping they’d go into, and that didn’t come off. So that was work that we’d budgeted on which we didn’t get, so again, that’s what I’m saying, there was – there was positives and negative aspects to how things were going in the Hunter Valley.
…
We’d been consulting – I suppose we were keeping a watch on what was happening with the Drayton, that second Drayton campaign, and at the same time trying to see whether there was anything else on the radar that when – when that came off, because the uncertainty of the timing that that Drayton campaign would stop, to see if there was any other opportunities that might be coming along to – for those guys to go into. So we were certainly keeping a close…watch on it.
…
[W]hen the signs were getting stronger, or the indications were getting stronger that the Drayton – second Drayton contract was going to actually come to an end, probably from memory, you know, around the couple of weeks before that 26th or thereabouts. So mid-June roughly. That’s where the indications were strong that it was going to come to an end and we were watching very closely around what our head count situation was.” 37
[52] Mr Gorfine, in cross examination, gave the following evidence:
“But there’s nothing you can specifically point to that says ‘This is what the big problem was at the Hunter Valley. This is how conditions deteriorated from March to June of 2009’?
A reduction of three head count at – at Mt Owen. The – the stopping of the – of the short-term Drayton contract, the first one. And then obviously the second one, that – that – and nothing ongoing beyond that in terms of short-term contracts, and not getting the – the other job at Mt Thorley, the – the Hunter Valley earth job that I referred to before, that we thought John and the other two – the rest of that small team that came out of Glendale were going to, so.
But the longer term – we’ve already said that the Mt Owen and the Liddell contracts are always longer term, set in length contracts; that’s correct, isn’t it?
Set in length, not in resources. Correct.” 38
[53] There was no suggestion in Mr Gorfine’s evidence that would persuade me to doubt the validity of an operational need to reduce employment within the Orica business, which included Mr Gorfine’s area of responsibility within that business. Mr Gorfine had been directed to reduce costs by 10 percent within his area of responsibility. The Drayton short term contract had concluded with four employees surplus to requirements and the business had been unsuccessful in obtaining further work at Mt Thorley. However, the question still remains, were the reasons for Mr Neville’s termination of employment genuine operational reasons?
[54] Mr Neville’s permanent position, as per the offer of appointment, 39 was the position of Operator/Shotfirer at the Mt Owen site. The Mt Owen contract is one of Orica’s long term contracts. The mine operator, Thiess Mt Owen, refused Mr Neville access to the site on 12 March 2009.40 It is not correct to say, as the TWU submitted, that at the conclusion of the short term Drayton contract, Mr Neville was to return to his “normal position” at Mt Owen and/or Liddell. The Mt Owen position was not available to him as he had been refused access to the site and the Liddell contract, the other long term contract, was not Mr Neville’s normal position.
[55] It was put on behalf of Mr Neville that the timing of the termination and the true reasons for Mr Neville’s termination warranted consideration.
[56] The timing issue raised by the TWU on Mr Neville’s behalf concerned events leading up to the actual date of termination and the date of termination itself, as that date was affected by the change to the legislation with the repeal of the Workplace Relations Act 1996 and the commencement of the Fair Work Act 2009, which commenced on 1 July 2009. The TWU argued that “it was no coincidence that on the last day of the legislation in its former form the respondent took advantage of its provisions and terminated the applicant’s employment…the operational reasons relied on by the respondent were not genuine in the sense that these were the ‘real, true or authentic’ reasons for the applicant’s termination”. 41
[57] In Boeing the facts of the case concerned an employee whose contract of employment contemplated assignment and reassignment to particular projects. As the last of these assignments was to conclude, Boeing and the employee discussed positions potentially available to the employee. Ultimately, Boeing reassigned the employee to another project; however, the employee refused to be reassigned and was terminated. The Full Bench said:
“To find, as the Senior Deputy President did, that Mr Acworth’s refusal to carry out a direction was the reason for the termination of his employment is true in one sense because absent the refusal there would have been no termination. But the termination was the result of a deliberate decision made by Boeing. Evidence as to the reasons for that deliberate decision are the ones which are relevant under s.643(8). As we indicated earlier in referring to Priceline, the reasons for termination are the reasons of the employer and, in particular, the reasons of the decision-maker. Where evidence is given by the employer of the reasons for termination, an analysis of the sequence of events is only relevant to the extent to which it tends to confirm or to undermine that evidence. In this case the starting point for the analysis should have been Boeing’s evidence as to the reasons for termination.
…
Where an employer terminates the employment of an employee with particular qualifications and experience because no suitable assignment can be found for an employee with those qualifications and that experience, the termination is for an operational reason. The reason is structural in nature. Such a decision is akin to a decision to terminate employment for redundancy arising from technological change, for example. While in this case Boeing’s reaction to Mr Acworth’s refusal to accept the proffered assignment was no doubt part of the reasons for the decision to terminate his employment, Mr Robinson’s belief that there was no suitable assignment was a genuine operational reason, even if it was not the exclusive reason, for the decision.
…
With respect, it appears that the Senior Deputy President’s analysis focused on questions of cause and effect rather than on the evidence as to the reasons for Boeing’s decision to terminate the employment. It is also possible that he may have concluded that the reasons advanced by Mr Robinson did not include genuine operational ones. Whichever is the case, the Senior Deputy President fell into error. There was no reason to reject Mr Robinson’s evidence as to the reasons for the decision to terminate Mr Acworth’s employment and those reasons included genuine operational ones. ” 42
[58] The TWU submission, outlined above, ignores the fact that the Drayton contract had finished, Mr Neville’s permanent role at Mt Owen was no longer available to him and the Liddell role was a temporary role pending the return of the permanent Orica employee, which occurred on 1 July 2009. Mr Russell, in his evidence, explained the sequence of events relating to the timing of Mr Neville’s termination of employment. I accept Mr Russell’s evidence 43 that Mr Neville had been denied access to his appointed role at the Mt Owen site, there was a requirement on the Liddell site for a 6th MMU operator for a limited period and Mr Russell placed Mr Neville into that role. Orica’s permanent shotfirer/operator for the role at Liddell returned to duties on 1 July 2009.
[59] The sequence of events in this matter, in my view, tend to confirm and do not undermine the evidence presented on behalf of Orica that a genuine operational reason existed for the termination. Regardless of whether the pending change to the legislation in relation to termination of employment for operational reasons was a consideration and part of the reason to terminate, at that time, does not displace the situation that there were no suitable positions available for Mr Neville and, therefore, “a genuine operational reason, even if it was not the exclusive reason, for the decision”. 44
[60] I am not persuaded that the reasons advanced by Orica for Mr Neville’s termination of employment were a sham. I am not persuaded by the TWU argument 45 and Mr Neville’s evidence46 as to the true reasons for the termination. I accept Mr Gorfine’s evidence.47 It was put to Mr Gorfine in cross examination that it was a combination of his past history with Mr Neville that lead to his selection for redundancy on 30 June 2009, to which Mr Gorfine replied:
“Well I have to absolutely disagree. I mean, all three reasons are totally incorrect. I think John, as a union delegate – as I’ve already said, John and I, I thought, had quite a good working relationship. Yes, we had our little issues occasionally but I think overall that we remained quite amicable and I quite – to be honest I quite enjoyed working with John as a union delegate, when we were – through those EBA negotiations. So to that one I’d say absolutely not. To the safety, as I said, you know, when John – I can’t recall any particular times when John stopped an operation, but if he did and it was legitimate, I applaud that, and – and that’s what we expect of our employees, and they do that. It’s not uncommon that they do that, and I can show you a list of recognition where we actually recognise formally our employees for taking such action. So totally disregard that.” 48
[61] I accept Mr Gorfine’s evidence on this point.
[62] The TWU relied upon a decision I made on 17 June 2009 49 concerning operational reasons. My decision in the Ticketek case is distinguishable on the facts from the present matter before me. In the Ticketek case I was not satisfied that Ticketek had produced any evidence of a financial nature in support of its economic rationale for the termination nor was I persuaded on the structural reasons advanced. In that decision Ticketek relied upon a generalised operational need in the industry, which was not specific to Ticketek. Further, Ticketek did not identify, to my satisfaction, the operational reasons for the termination of the employment of the particular employee. That is not the case in the present matter before me.
[63] I accept Mr Gorfine’s evidence as follows:
“It wasn’t the reason. We did not want to – we have a lot of high maintenance employees and we don’t get rid of them. We don’t – it wasn’t – we didn’t get rid of John because he was high maintenance. We didn’t want to get rid of John. I don’t want to get rid of shot firers and operators. They take a long time to train back and yes, look, it’s experience that we don’t want to get rid of but we had no choice.” 50
CONCLUSION
[64] In conclusion, I am persuaded that Orica has satisfied the evidentiary burden required of it to establish genuine operational reasons for the termination of Mr Neville’s employment.
[65] In accordance with s.649(2) of the Act I am satisfied that Mr Neville’s termination of employment by Orica was for genuine operational reasons as outlined in the evidence before me. Mr Neville’s application to the extent that it is made on the ground referred to in paragraph (a) of s.643(1) is dismissed.
[66] An order pursuant to s.649(2)(b) reflecting this decision will issue separately. Mr Neville’s application pursuant to s.643(1)(b) will be listed for the purpose of conciliation in due course.
COMMISSIONER
Appearances:
N. McIntosh, Transport Workers’ Union of Australia for J. Neville.
P. Copeland, solicitor, with R. Payne for Orica Australia Pty Ltd.
Hearing details:
2009.
Toronto:
September, 1.
1 Exhibit R2 and R3.
2 Exhibit R1.
3 Exhibit A1.
4 Exhibit R2 at 10.
5 Exhibit A1 at 15 to 17.
6 Ibid. at 9.
7 Ibid. at 10 and 11.
8 Ibid. at 12.
9 Exhibit R1 at Attachment 1.
10 Ibid. at 6.
11 Ibid. at 10.
12 Ibid. at 12 to 18.
13 Boeing Australia Limited v BAcworth [2007] AIRCFB 730 at [6].
14 Cruickshank v Priceline Pty Ltd [2007] AIRCFB 513, PR977445 at [6]; Village Cinemas Australia Pty Ltd v Carter [2007] AIRCFB 35 at [26] and [28].
15 TWU written submissions at 5.
16 Ibid. at 11.
17 Attachment 1 and 2 to Exhibit R2 (Mr Gorfine’s statement).
18 TWU written submissions at 19 and 20.
19 Ibid. at 27.
20 Ibid.
21 Ibid.
22 Orica reply submissions at 5.
23 [2007] AIRCFB 513.
24 Ibid. at [9] and [10].
25 Ibid. at [30].
26 [2007] AIRCFB 35.
27 Ibid. at [28].
28 Ibid. at [40].
29 [2007] AIRCFB 730.
30 Ibid. at [6].
31 Ibid. at [7].
32 Exhibit R2 at 4, 8 and 9.
33 PN685.
34 Exhibit R3 at Attachment A, page 2.
35 PN350.
36 PN344.
37 PN351; PN358; PN360.
38 PN397; PN398.
39 Exhibit R1 at Attachment 1.
40 Ibid. at Attachment 2.
41 TWU written submissions at 27.
42 [2007] AIRCFB 730 at [21], [23] and [28].
43 Exhibit R1 at 11 to 18.
44 [2007] AIRCFB 730 at [23].
45 TWU written submissions at 34 and 35; PN698; PN699.
46 Exhibit A1 at 32 to 34.
47 Exhibit R3 at 7 to 9;PN487; PN497; PN502; PN514 to PN520; PN531; PN536; PN538.
48 PN539.
49 Anson v Ticketek Pty Ltd[2009] AIRC 568.
50 PN549.
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