Jordan Claessen-Smith v Rivergum Homes Pty Ltd
[2020] FWC 4318
•17 SEPTEMBER 2020
| [2020] FWC 4318 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jordan Claessen-Smith
v
Rivergum Homes Pty Ltd
(U2020/7225)
COMMISSIONER HAMPTON | ADELAIDE, 17 SEPTEMBER 2020 |
Application for an unfair dismissal remedy – preliminary jurisdictional issue – whether genuine redundancy – new homes sales role – impact of COVID-19 pandemic restrictions – whether dismissed for reasons other than operational – whether job no longer required – whether consultation requirements of modern award met – whether reasonable redeployment options overlooked – duties continued but job no longer required due to operational changes – merit of changes beyond the scope of this matter – consultation after a decision had been made was undertaken and requirements met – whether reasonable in the circumstances that applicant be redeployed into the new position – other positions and work assessed and not reasonable to redeploy at the relevant time – found on balance that not reasonable in all of the circumstances for applicant to have been redeployed within the employer’s enterprise or the enterprise of an associated entity – genuine redundancy found – application dismissed.
1. Introduction and background
[1] Mr Jordan Claessen-Smith (Applicant) was dismissed from his employment as a New Homes Consultant in the Sales team of Rivergum Homes Pty Ltd (Rivergum or Respondent) on 20 April 2020, which was effective on 4 May 2020. Part of the context for the dismissal is set by the COVID-19 Pandemic and the associated control measures introduced by Governments. Rivergum informed Mr Claessen-Smith at the time that he was being redundant.
[2] Mr Claessen-Smith disputes that the dismissal was a genuine redundancy and has brought this application pursuant to s.394 of the Fair Work Act 2009 (the Act) claiming that his termination was unfair.
[3] Rivergum is part of a related group of companies (the Rivergum Group) conducting retail house sales and construction, and development construction. Mr Claessen-Smith was engaged in the retail sales area since his employment commenced July 2013. At the time of the dismissal, Mr Claessen-Smith was based at the Parafield display village (North of Adelaide), being one of 8 display villages operated by Rivergum in South Australia.
[4] It is common ground that Mr Claessen-Smith was protected from unfair dismissal and that this application has been validly made. However, Rivergum contends that the dismissal was a genuine redundancy within the meaning of s.389 of the Act, and as a result, the dismissal cannot be found to be unfair due to the operation of s.385. 1 In the alternative, Rivergum contends that the dismissal was not otherwise unfair.
[5] Having consulted with the parties, by consent, I determined that the preliminary jurisdictional issue associated with the dispute about genuine redundancy would be heard in conjunction with the broader merit and remedy considerations. However, given the import of s.385 and s.396 of the Act, 2 I commence with the preliminary jurisdictional issue and for reasons that will become clear it has not become necessary or appropriate to deal with the merit or remedy issues in this decision.
2. What is a genuine redundancy within the meaning of the Act?
[6] The meaning of genuine redundancy is set out in s.389 of the FW Act in the following terms:
“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.”
[7] I will, only for convenience, describe the three elements of s.389 as being:
• Section 389(1)(a) – job no longer required due to changes in operational requirements;
• Section 389(1)(b) – compliance with consultation requirements of a modern award or enterprise agreement; and
• Section 389(2) – reasonable redeployment.
[8] Mr Claessen-Smith contends that the General Retail Industry Award 2010 (Retail Award) or the Miscellaneous Award 2010 (Miscellaneous Award) applied to his employment. The Awards each contain the same relevant consultation obligations. Rivergum did not concede this element but contended that in any event it had met any such obligation.
[9] As a result, if a modern award applied, all three elements of s.389 of the Act must be met in order to be a genuine redundancy. Rivergum contends that the Commission should be satisfied on all three matters and all are disputed by Mr Claessen-Smith.
[10] The Explanatory Memorandum to the Fair Work Bill 2008 explained the meaning of ‘genuine redundancy’ as follows:
“Clause 389 – Meaning of genuine redundancy
1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.
1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548. The following are possible examples of a change in the operational requirements of an enterprise:
• a machine is now available to do the job performed by the employee;
• the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.
1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.
1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.
1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.
1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.”
[11] Given s.385(d) of the Act, the fundamental question which arises is whether the Commission is satisfied that the dismissal was not a case of genuine redundancy. In practice, a positive finding that the dismissal was a genuine redundancy also disposes of the issue. The respondent bears an evidentiary onus to demonstrate the factual elements of the objection.3
[12] In Ulan Coal Mines Limited v John Howarth and others4 (Ulan Coal v Howarth), a Full Bench of the Commission held that:
“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
[18] In Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” (at par [27])
[19] In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the “jobs” of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 non-trades mineworker positions which were surplus to the Company’s requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.
[20] These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.”
[13] In Jones v Department of Energy and Minerals 5 Justice Ryan held that:
“...His Honour’s description was cast in terms of a “job” in the sense of a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organization, to a particular employee. However, it is within the employer’s prerogative to rearrange the organizational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganization of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organization, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant...” 6
[14] The Act does not define the term ‘operational requirements’. It is a broad term that permits consideration of many matters including:
• the past and present performance of the business;
• the state of the market in which the business operates;
• steps that may be taken to improve efficiency by installing new processes, equipment or skills, or by arranging labour to be used more productively, and
• the application of good management to the business.7
[15] In Christina Adams v Blamey Community Group, 8 the Full Bench of the Commission stated that task under s.389(1)(a) of the Act in the following terms:
“… it is necessary to state at the outset that consideration of whether the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the enterprise does not involve a merits review of the employer’s decision to make the person’s job redundant. It is not to the point that it may have been open to the employer to make a different operational decision which may have allowed the relevant employee’s job to be retained. As was stated in Low v Menzies Property Services Pty Ltd, “Whether it was objectively fair or justifiable to decide to abolish a position is beside the point, as long as the employer acted as it did because of changes in its operational requirements.”What s.389(1)(a) requires is for findings of fact to be made as to whether, firstly, the employer has made the decision that the relevant employee’s job is no longer required to be performed by anyone and, secondly, whether that decision was made because of changes in the operational requirements of the enterprise. If there was an ulterior motive for the decision - that is, if the real reason for the decision did not genuinely relate to any change in operational requirements, whatever the ostensible reason may have been - then it will not be possible to make the second finding of fact. However once these findings of fact are made, the element of the genuine redundancy definition contained in s.389(1)(a) is satisfied and no further inquiry is necessary.” 9
[16] Section 389(1)(b) requires compliance with the consultation requirements where relevant of, in this case, a modern award. I will deal with the specific requirements of this provision and the modern awards later in this decision.
[17] In terms of s.389(2) of the Act, a Full Bench in the Ulan Coal matter10 observed:
“[26] First, s 389(2) must be seen in its full context. It only applies when there has been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of genuine redundancy the employer has a complete defence to the application. Section 389(2) places a limitation on the employer’s capacity to mount such a defence. The defence is not available if it would have been reasonable to redeploy the employee. The exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances.
[27] Secondly, it is implicit in the terms of s 389(2)(b) that it might be reasonable for an employee dismissed by one employer to be redeployed within the establishment of another employer which is an entity associated with the first employer. It follows that an employer cannot succeed in a submission that redeployment would not have been reasonable merely because it would have involved redeployment to an associated entity. Whether such redeployment would have been reasonable will depend on the circumstances. The degree of managerial integration between the different entities is likely to be a relevant consideration.
[28] Thirdly, the question posed by s 389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.”
[18] The approach adopted in the above matter should also be considered in light of the following comments of a later Full Bench11 of the Commission:
“[34] Honeysett is authority for the proposition that for the purpose of s.389(2)(b) it is sufficient if the Commission identifies a suitable job or position to which the dismissed employee could be redeployed. The Commission must then determine whether such a redeployment was reasonable in all the circumstances. We note that given the factual context the Full Bench in Honeysett did not need to consider whether s.389(2) may be satisfied if the dismissed employee could be redeployed to perform other work within the employer’s enterprise (or that of an associated entity.) Given its particular factual circumstances Honeysett is not authority for the proposition that it is always necessary to identify a particular job or position to which the dismissed employee could have been redeployed.
[35] As we have mentioned, the use of the past tense in the expression ‘would have been reasonable in all the circumstances for the person to be redeployed ...’ in section 389 (2)(a) directs attention to the circumstances which pertained when the person was dismissed. As noted in Honeysett, ‘[T]he exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances’. The question is whether redeployment within the employer’s enterprise or an associated entity would have been reasonable at the time of dismissal. In answering that question the Full Bench in Honeysett observed that a number of matters are capable of being relevant:
“They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered”.
[36] We have earlier set out the submissions of the appellant and the respondent as to the proper construction of s.389(2) (see paragraphs [15] to [18] above). We accept the respondent’s submissions. For the purposes of s.389(2) the Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must also be an appropriate evidentiary basis for such a finding. Such an interpretation is consistent with the ordinary and natural meaning of the words in the subsection; the Explanatory Memorandum and Full Bench authority. We acknowledge that the facts relevant to such a finding will usually be peculiarly within the knowledge of the employer respondent, not the dismissed employee. If an employer wishes to rely on the ‘genuine redundancy’ exclusion then it would ordinarily be expected to adduce evidence as to the following matters:
(i) that the employer no longer required the dismissed employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
(ii) whether there was any obligation in an applicable modern award or enterprise agreement to consult about the redundancy and whether the employer complied with that obligation; and
(iii) whether there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employer.
[37] The evidence in relation to (iii) would usually include canvassing the steps taken by the employer to identify other work which could be performed by the dismissed employee.” (Citations omitted)
[19] It is clear on the above authorities that the justification for the dismissal - whether the employer no longer required the applicant’s job to be performed by anyone because of changes in the operational requirements, is to be assessed objectively based upon the evidence about the circumstances at that time. Further, although evidence of later events may be relevant to ascertain the veracity of the facts - such as whether the job is no longer required and what alternatives existed, the reasonable redeployment prerequisite is also to be assessed having regard to all of the circumstances in existence at that time and not based upon later developments not known or reasonably understood at that time. This frame of reference is important in this matter for reasons that will become clear.
[20] I also add that whilst the COVID-19 pandemic has had a significant impact upon many businesses, their employees and the community more generally, in matters where the pandemic is relied upon by a party, the Commission should be careful to objectively judge the relevant circumstances based upon proper evidence. I have done so in this case.
3. The cases presented by the parties on the jurisdictional issue
3.1 Rivergum
[21] Rivergum contends that the dismissal occurred because the job concerned was no longer required due to changes in operational requirements on the following basis:
• As a result of, and in direct response to, the impact of COVID-19 and the introduction of “lock down” measures, the Respondent took immediate steps to assess and revise its operations;
• It took various measures, including the introduction of salary pay reductions by 10% for most managerial staff, to immediately control costs, and position the business for sustained inactivity;
• Was forced to close display villages to public access without certainty as to how long this would continue, or whether it would recur, but which would have an immediate and direct effect upon the employment of sales consultants and the income to the business, at the time, and in the form of ‘pipeline’ sales;
• Redundancies occurred across the business and the Applicant’s position was not the only one made redundant;
• The decision to reduce the number of consultants at the village at which the Applicant worked, from 3 to 1, would bring it into conformity with the other of its display villages attended by 1 staff member when open to the public.
[22] Rivergum contends that the restructure of the business was necessary to secure its current and future operations and that the decision to dismiss the Applicant was an operationally-driven decision that resulted in the termination of his employment in the context of an overall reduction in employee numbers.
[23] Further, in considering whether a redundancy is genuine within the meaning of the Act, the enquiry is not directed to the process for selection of individual employees for redundancy unless this is because the selection is for one of the prohibited reasons set out in the Act. To the extent it is suggested that the Applicant’s selection was motivated by an ‘entitlement’ to long service leave, that is not made out on the evidence. That is, there was in fact no entitlement at the time and this aspect was not a factor in the decision. To the extent the dismissal is alleged to be because of sick leave taken, the evidence demonstrates that in fact the Applicant’s effective date of termination was delayed, to make payment to him of sick leave to which he would not have been entitled, had his employment been terminated by payment in lieu on the date he was advised of the decision (being 20 April 2020).
[24] In relation to any consultation obligations, Rivergum does not concede that the Retail Award (or the Miscellaneous Award) applied as a matter of law to the Applicant’s employment but contends that if that Award, or any modern award applied, the Respondent has discharged its consultation obligations under that instrument. It submits amongst other matters that:
• The evidence demonstrates that consultation was meaningful, genuine and provided the Applicant with the opportunity to change or influence the mind of the Respondent, which was not unduly fixed; and
• the consultation occurred in a way which allowed the Applicant to meet in person, with his support person and legal representative, and provide opportunity to make considered submissions as to alternatives which the Respondent then considered before coming to any final view.
[25] Rivergum contends that the question as to redeployment needs to be considered in the context of the business environment facing the Respondent at the time of the dismissal. In that regard, it submits that:
• It was not genuinely contended by the Applicant that it would be reasonable to deploy him to its Victorian operations.
• In relation to the South Australian operations, in the context of an overall reduction in head count, where the business environment was uncertain, in a stage of lockdown and where the display village could operate with one consultant, there were no positions into which it could be said the Applicant could be reasonably deployed.
• Aside from there being no available positions, the Applicant did not have the skills needed for the positions which he suggested could be performed, and one of those positions (Drafter) was in fact made redundant shortly after. Taking account of the particular circumstances associated with the dismissal, no redeployment position was reasonable.
• The alleged advertisement for new home consultants was not acted upon and was only online having been left ‘live’ from a previous interest in recruitment.
[26] Rivergum submits that it has made out the jurisdictional objection and as a result, the unfair dismissal application should be dismissed.
[27] Rivergum led sworn evidence from the following:
• Mr Neil O’Reilly – Chief Operating Officer of the Rivergum Group; and
• Mr Ryan Lee – National General Manager of the Rivergum Group.
3.2 Mr Claessen-Smith
[28] As set out earlier, Mr Claessen-Smith disputes all 3 elements of the claimed genuine redundancy.
[29] In relation to the notion that the job concerned was no longer required due to changes in operational requirements Mr Claessen-Smith contends that:
• He was dismissed on grounds other than operational reasons.
• The responsibilities of the Applicant's position are currently being performed by another employee of the Respondent and an individual contracted by the Respondent.
• The submission of the Respondent that the Applicant's position was made redundant as a result of the COVID-19 pandemic is untrue and rather, the Respondent has sought to utilise the COVID-19 pandemic to their advantage to terminate the Applicant's employment. In that regard, it was suggested that the business was already under some pressure prior to the pandemic.
• The real reason for the dismissal was an attempt to avoid the obligation to pro-rata Long Service Leave (LSL) that was due to apply shortly after the termination and/or because Mr Claessen-Smith had taken personal (sick) leave. Further, that the dismissal was motivated by the desire to replace the Applicant with sales staff of different and lower commission arrangements. 12
• At the time of termination, the Applicant was located at the Parafield Display Village but had worked across a number of other villages. The opening hours of the Parafield Display Village had not changed during the period leading up and after the termination of the Applicant. Further, the Respondent has claimed in media publication, The Advertiser, that it has not been impacted by the COVID-19 pandemic and that it is expecting an increase in sales. In addition, it can be concluded that the various government initiatives, particularly the recent 'Home Builder' grant have increased work in the building industry.
[30] As to Rivergum’s consultation obligations, Mr Claessen-Smith contends that the Respondent was obliged to comply with the obligation under the Retail Award (or the Miscellaneous Award) and had failed to do so. In particular:
• The Respondent had decided to terminate the Applicant prior to any consultation or discussion and was a result was not able to properly consider any views of the Applicant.
• The Respondent failed to consult with the Applicant about the alleged operational changes prior to deciding to terminate the Applicant.
• The Respondent failed to discuss with the Applicant the likely effect of the alleged operational changes and measures that could be taken to avoid or reduce the adverse effects of these changes on the Applicant.
• The Respondent failed to consider the re-deployment options proposed by the Applicant.
[31] In relation to redeployment, Mr Claessen-Smith contends that:
• He was a long-serving and committed employee of the Respondent and sought redeployment within the Respondent's business.
• The Respondent did not consider redeployment as they had already decided to terminate the Applicant.
• Rivergum did not explore his previous planning experience and his capacity to perform other roles.
• The Applicant should have been redeployed into a role utilising that planning experience and/or on other roles and he was willing to accept less favourable positions in order to retain his employment with Rivergum.
[32] Mr Claessen-Smith submits that the jurisdictional objection has not been made out and the substantive merit of the application should be determined.
[33] Mr Claessen-Smith provided written and oral evidence and also relied upon the evidence of Mr Adrian Laidler, a former employee of Rivergum who had worked alongside him for a period.
4. Observations about the evidence
[34] There are some significant factual disputes in this matter, including matters of perspective, degree and emphasis. Where there is a direct factual dispute on a matter, I have resolved such having regard to the nature of that evidence, the degree to which the witness was able to give direct first-hand objective evidence about the issue, and my view about the credibility of the evidence generally.
[35] In general terms I found that each of the witnesses, including the Applicant, gave their evidence openly and with conviction, making appropriate concessions. I did however consider that some of the witnesses’ statements tended to subjectively summarise the proponent’s view about the issues rather than the objective facts. In particular, Mr Claessen-Smith sought at times to engage in the advocacy of his case and this led to some uncertainty about the distinction between the reliable objective facts and propositions that might advance his case. As a result, I have treated those elements with caution.
[36] I found Mr Lee’s evidence to be a genuine and persuasive. I also found Mr O’Reilly’s evidence to be reliable, and whilst he could not recall the detail of some of the monthly financial reports of the Respondent during the immediately relevant period, this did not form part of the Respondent’s case and he was not on notice that these issues were to form part of the Applicant’s propositions. As to the motivations for the dismissal of Mr Claessen-Smith, I found that the evidence of both Mr Lee and Mr O’Reilly was convincing, consistent with the prevailing circumstances, and not significantly challenged.
[37] I found that the evidence of Mr Laidler to be of only some assistance to the Commission. His general building industry experience, including whilst employed by Rivergum, was relevant to the general context of the matter; however, he was not able to shed much relevant objective light on the critical issues in dispute given that he was not engaged by the Respondent at the time and did not have first-hand knowledge of the recent events.
5. Was Mr Claessen-Smith’s dismissal a genuine redundancy?
5.1 The broad factual context
[38] The Rivergum group is comprised of Rivergum Development Projects Pty Ltd, Rivergum Homes Pty Ltd, Rivergum Homes (Vic) Pty Ltd, Rivergum Group (Aust.) Pty Ltd and Truevest Finance Pty Ltd.
[39] There are two sides of Rivergum Homes South Australian business – Retail sales construction (building for individual retail customers) and development construction (building for or in partnership with a Developer, or as the Developer themselves). Mr Claessen-Smith was employed in the sales team for retail sales construction. The development construction side of the business also operates in Victoria. Rivergum’s Queensland operations wound up in March 2020.
[40] Mr Claessen-Smith was employed by the City of Playford for around 6 months as a casual Planning Officer (Consultant) prior to commencing employment with the Respondent. This was work experience undertaken as part of his Bachelor degree course in Urban and Regional Planning majoring in Social Work that he was undertaking at that time.
[41] Mr Claessen-Smith started working for Rivergum Homes Pty Ltd in July 2013 as a New Homes Consultant. Sometime after 2016, Mr Claessen-Smith was promoted to the position of Retail Home and Land Consultant and by 2019 was in the position of Sales Team Leader for Rivergum. As a Team Leader he was responsible for a team of Sales Consultants based at various locations in South Australia. On or around May 2019, Rivergum removed the position of Sales Team Leader from the business and the Applicant returned to his position as a New Home Consultant.
[42] As at the date of termination (20 April 2020), Mr Claessen-Smith earned $61,200 per annum, inclusive of superannuation but exclusive of commission payments. The commission payments were based upon the sales results.
[43] Rivergum had 8 South Australian display villages in April 2020.
[44] In April 2020, the following sales positions existed within the South Australian operations of Rivergum:
a. Mike Kendall (General Manager – Sales) located at Mile End Office;
b. Michael Hadgis (Assistant General Manager) located at Mile End Office;
c. Sales Concierge located at Mile End Office;
d. Jordan Claessen-Smith (New Home Consultant) located at Parafield;
e. AF New Home Consultant, located at Parafield;
f. New Home Consultant, located at Seaford;
g. JF New Home Consultant, located at Parafield;
h. New Home Consultant, located at Mt Barker – Bluestone;
i. New Home Consultant, located at Brookmont;
j. New Home Consultant, located at Victor Harbor;
k. New Home Consultant, located at Mt Barker – Aston Hills;
l. New Home Consultant, located at Lightsview;
m. New Home Consultant, located at Mile End Office; and
n. New Home Consultant, located at St Clair. 13
[45] As is clear from above, Mr Claessen-Smith was based at the Parafield display village at the time of the events leading to his dismissal. That village, unlike the rest of the retail sales villages in South Australia, had 3 sales staff, with 2 generally being expected to be present during opening hours. In general terms, the remainder of the villages were staffed so that there would be one sales staff member present at most times. The sales staff, including Mr Claessen-Smith, were allocated to nominated display villages and expected to understand the local community and housing stock on display but could and did work at other sites from time to time.
[46] There is some dispute about Mr Claessen-Smith’s relative sales performance. His sales target was three (3) contracts per month. This was achieved in February and March 2020; however, Mr Claessen-Smith only exceeded 3 contracts in one month of the 2019 year. I observe that the Applicant was, at the time of his dismissal, on a Performance Improvement Plan associated with his sales work, and a warning concerning alleged inappropriate conduct, and that the fairness of these was also disputed in these proceedings. Mr Claessen-Smith was amongst the highest in terms of overall gross sales and was the most experienced sales staff member (service with Rivergum) at the time.
[47] When the impact of the COVID-19 pandemic became clearer in Australia during March 2020, both national and state governments began implementing control measures that impacted upon business and the community more generally.
[48] On 29 March 2020, all eight of the display village locations in South Australia were “closed” to the general public as a result of what Rivergum understood to be the impact of variously announced control measures and a prudent risk minimisation approach. The “closure” meant that the villages could be inspected by appointment, but the public were not free to visit the villages at any time during what had been the normal opening hours. The villages were also not always staffed during those times. The public might drop in and if the village was being staffed and if there were not already customers present, casual inspections were allowed. The sales centre in Victoria (where customers buy homes ‘off the plan’) also closed on 29 March 2020. The Victor Harbor display centre closed permanently on the same day.
[49] I observe that the restrictions on the operation of the display villages and many other significant COVID-19 related restrictions were progressively introduced and remained in place between late March and mid May 2020. At the time of the events leading to the dismissal of Mr Claessen-Smith, the duration of the restrictions was not known with various public predictions, including that some significant constraints on businesses’ public facing activities might remain for some months, being made by the Governments.
[50] Rivergum’s revenues are for the most part generated by actual construction on site. This means that there is a lead time between the taking of a deposit ($500 per home during the height of the COVID-19 restrictions but normally $2000 to $3000), and the revenue starting with the commencement of construction approximately 36 weeks later. Further, until the construction is finally approved there is no guarantee of revenue. The overall time between a customer coming through the display centre door and making a deposit, and the receipt of significant revenue by Rivergum, may be at least 10 or 11 months. This lead time had a bearing upon the decision-making process and timeframe for Rivergum when responding to the threat posed by the pandemic.
[51] The immediate impact of the restrictions placed upon the display villages was a reduction in visits from around 150 to 200 per week across the villages to the low teens for multiple weeks, with some periods as low as 10 in any one week. Objectively, this would have been expected to have an impact on future sales, deposits and revenue, despite the on-line presence of the business.
[52] In March 2020, Rivergum determined a response plan involving the following elements:
• Twelve South Australian Senior Managers and Executives taking pay cuts of 10% and Victorian Managers taking pay cuts of 20% from 1 April to 30 June – this was implemented with the exception of 2 managers whose roles were increased as a result of some of the changes);
• Consideration of head-count reductions via redundancies in South Australia and Victoria – this subsequently occurred including redundancies;
• Reduction in cleaning and maintenance of work premises not being used;
• Improvement of digital and remote engagement with consumers by adding technological improvement to its websites – these improvements were implemented on 28 and 29 March 2020 and built upon some existing digital services;
• Reduction in all marketing expenditure in South Australia and Victoria and no ‘new spend’ in this area;
• Reduction in the vehicle fleet in South Australia by returning cars with expired leases to Toyota Fleet Management;
• Reviewing and cancelling software packages (Recruitpack (as recruitment was to be put on hold) and Adobe software licensing);
• Requesting some employees to take annual leave or leave without pay for the month of April;
• Negotiating rent relief with landlords;
• Delaying or cancelling the acquisition of future display homes and villages in South Australia;
• Negotiating a cost saving for furniture rental;
• Putting pre-planned and negotiated information technology purchases on hold; and
• Cancelling an insurance policy.
[53] An advertisement for a ‘New Home Consultant’ with Rivergum was in the media on or around 24 March 2020. However, this was part of an ongoing series in place before the COVID-19 pandemic and no new employees were being sought, or engaged, as a result.
[54] As the Government restrictions were rolled out and no clear indication as to the length or depth of these was known, Rivergum continued to provide information to its staff about the challenges facing the business and some of the strategies being implemented. The early communications starting from 16 March 2020 outlined the escalating situation, some preliminary operational changes, and advice that business continuity planning was being reviewed. 14 Later communications on 23 March 2020 confirmed the implantation of various initiatives to minimise the health, financial and operations risks and provided feedback to responses provided by staff to the earlier information.15 On 25 March 2020, Rivergum informed staff about the impact on the display villages in the following terms:
“Morning Team,
As the situation continues to unfold, we are committed to keeping you up to date.
Last night the PM announced a number of new restrictions (see a full list here provided by news.com.au) and among those restrictions is one that is close to home being a ban on "auctions and open house inspections". This is not specifically addressing display home inspections, however we believe it is appropriate to respond with our own measures that ensure the health and safety of our staff, customer and community alike. We are also focussed on ensuring we maintain an environment where we continue to (safely and responsibly) capture as many leads as possible and remain open for business.
Starting from today, we will be limiting inspections of our display homes (and our Victorian sales office) to one couple at a time, on the basis of one couple per consultant (for those villages with more than one consultant manning the sales office at the same time). We will be managing this with the help of some simple signage that marketing are currently producing to be distributed to all of the display villages along with social media posts and updates to our website COVID-19 response page outlining these additional safety measures.
This new measure can simply be explained as follows:
• Firstly, and until further notice, our Display Homes will remain manned during their traditional hours of operation. Inspections will simply be managed differently.
• When a couple enter the sales office, the sales consultant will welcome the customers, explain the new safety measures and proceed to put a sign on the front door that essentially informs any further prospective customers “We have implemented measures to protect the safety of our staff and customers alike and are currently undertaking a 10-15 minute inspection, please wait here and we will be with you shortly to show you through our great homes. Alternatively, please call me on my mobile xxxx xxx and we can arrange another suitable time to show you through. Thankyou for your patience and understanding while we aim to do our bit during these unprecedented times" ...or something along these lines - our Marketing guru Duncan will be sure to nail these comms!
The sales team are currently being briefed in more detail on the above in their sales meeting, however I wanted to make sure all staff are informed and have confidence in the fact that we are constantly reviewing the situation and responding rapidly to ensure we protect the business in the best way possible as the situation unfolds.
Thanks again for the effort you are all putting in to keep the jobs moving through the system, our ability to navigate through these uncertain times relies on us all bandying together and looking after one another.
I will be in contact again when new information comes to light, if not earlier.
… … 16”
[55] Further information on the impact of the restrictions upon the business and the manner in which the display villages would operate was provided on 29 March 2020 including the use of digital booking system for the villages. 17 On 31 March 2020, Rivergum also advised staff that as a result of the developing situation it had requested a number of staff to take annual leave and/or leave without pay in the following terms:
“… …
Today we have made the difficult decision to act and that decision has resulted in a number of our valued staff members being asked to take annual leave and/or leave without pay from their roles for a 30 day period while we assess the long term impact of this downturn. This decision has not been taken lightly; we have met as an executive group and Senior Management Team on a number of occasions over the past weeks to consider all available options and what outcome serves the greatest number of people possible. We have also made this decision having fully assessed the recent Prime Ministers 'Economic Lifeline' wage subsidy package in detail and sought professional advice as to what it means for our business and people.
For further clarity, today's outcome was a response to the current COVID-19 impacts to our business with a genuine expectation that the environment will get worse before it improves. While we expect it to get worse in the short term, we do believe it will rebound as government isolation measures flatten the curve, clarity around vaccines is provided and government stimulus packages targeted to the new home buyer market expected to be announced. It is for this reason we made the decision to place several employees on leave as opposed, to make the positions redundant. We are hopeful to see a return in the market sooner rather than later and an opportunity to bring these valuable people back into the business as soon as possible.
I believe it is also important to share with you that our considerations and cost saving measures started from the top. As of this week, all executives and senior managers in the business have taken pay cuts with a view to supporting the business and saving as many Rivergum jobs as possible. In these times we must draw on our empathy and kindness and seek to look after each other to the best of our ability.
We are yet to see the full impact of the spread of COVID -19 on our residential construction industry. Therefore our focus remains on looking to the future, planning for the worst and hoping for the best and at this stage that means doing everything we can to protect the roles of all of our employees and the business in general, to the best of our ability.
Finally, I would like to thank you all for your consistent hard work and focus on securing every possible sale and progressing every single job forward as efficiently as possible. Ensuring this remains our primary focus will go a long way to protecting this business and the jobs it supports. I also appreciate that this is a stressful time and that the unknown future, and what it may mean for each of you, will be at the forefront of most of your minds. While this is not intended to be alarmist, if you or anyone you know are experiencing any level of extraordinary stress during the COVID-19 outbreak, I encourage you to seek out help, whether it be with a friend, a college, a mental health professional or one of the valuable resources below – I personally am happy to lend an ear to anyone who believes it may help:
https:/ / you would like any further clarity around any of the above communication, please speak with your manager, Neil O'Reilly or myself.
… … 18”
[56] As indicated above, Rivergum requested a number of employees to take annual leave or unpaid leave. This included Mr Claessen-Smith and one of the other sales staff members (AF) located at the Parafield display village. The remaining sales staff member (JF) continued to work but saw customers generally by appointment only at the display village. The decision to “send” up to 8 employees on leave was undertaken to provide more time for the business to assess the impact of the pandemic and to consider whether redundancies could be avoided. Rivergum considered that these positions were not essential to the immediate business’ operations that were able to continue.
[57] In mid-April 2020, Rivergum identified that it may not need three New Home Consultants at Parafield and could consider bringing the number of consultants at that site back to one like other display villages. This view was taken in light of the changed conditions, the continued uncertainty about the depth and length of the pandemic and restrictions, and the developing impact upon display village attendances outlined above.
[58] On 14 April 2020, Rivergum advised Mr Claessen-Smith about his position no longer being required and I will return to the detail of this communication and the subsequent discussions later in this decision.
[59] Mr Claessen-Smith was not attending the workplace from 4 March 2020. He advised his Manager that this was due to his need to have surgery, however I accept that Mr O’Reilly and Mr Lee were not aware of the fact that the Applicant was on personal (sick) leave until later.
[60] On 20 April 2020, following a consultation process that I will also deal with as part of later consideration of this matter, Rivergum advised Mr Claessen-Smith that he was being made redundant and that this would take effect on 4 May 2020. This date coincided with the duration of Mr Claessen-Smith’s latest medical certificate.
[61] Mr Claessen-Smith was treated as being on paid personal (sick) leave from 20 April 2020 to 4 May 2020. Some earlier absences, which had been treated as annual leave, were converted to personal leave when Rivergum received some medical certification and the “annual leave” involved was recredited. On 28 April 2020, he received payment for four (4) weeks’ notice in lieu, 11 weeks’ redundancy pay, payment for accrued but untaken annual leave, and remaining salary.
[62] Eventually, in addition to the dismissal of Mr Claessen-Smith, the redundancies at Rivergum involved the following 11 positions, all but one of which was based in South Australia, with these being implemented between 1 April 2020 and up to 2 May 2020:
• Executive Assistant;
• General Manager of Sales;
• Finance Assistant;
• Customer Care Officer;
• National Design Director;
• Selections Consultant;
• New Homes Sales Consultant (Victor Harbor);
• Admin Officer;
• Selections Consultant;
• New Homes Sales Consultant (Parafield); and
• Drafting employee.
[63] The objective evidence is that none of these positions were replaced. There were some subsequent changes in positions of potential relevance to the present matter, but these do not suggest that the job undertaken by Mr Claessen-Smith continued. I will also return to this aspect as part of the consideration of reasonable redeployment issues.
[64] At the end of May 2020 Rivergum hired a casual Sales Host to undertake ‘meet and greet’ work on an ad hoc basis in different display villages wherever required. This was intended to be a short-term contract commencing in July 2020 and did not involve the same conditions and arrangements applying to the New Home Consultants.
[65] With the redundancy of Rivergum’s General Manager of Sales, this role was combined with the position of General Manager of Marketing. Given the combined responsibilities, an existing sales employee was given an Assistant Manager role (in addition to their ongoing sales role) to provide support on a temporary basis pending further review.
[66] The evidence is that although deposits significantly declined in April and partially recovered in later May 2020, Rivergum did not become eligible 19 for the Job Keeper scheme in terms of the South Australian operations. The Victorian business did become eligible for that support. Further, ultimately neither sales nor revenue for Rivergum have been impacted to a significant extent by the pandemic in the longer term.
[67] In response to the Commonwealth Government’s new Home Builder grants 20 and the increased enquiries received from potential customers, Rivergum hired a full-time Business Development Manager (BDM) on 1 July 2020. The position was at that time temporarily assisting with residential sales enquiries, and Rivergum intended that the position was to be a predominantly strategic position in the long term and to be largely focused on developing relationships for the development side of our business.
[68] Given Mr Claessen-Smith’s location and service, and the operation of the relevant LSL laws, 21 he would have become entitled (subject to certain caveats) to a pro-rata payment of LSL once he had completed 7 years of relevant continuous service. That entitlement, 9.1 weeks at 7 completed years plus 1.3 weeks for each subsequent completed year of service, was however subject to the condition that it was not payable in relation to service short of 10 completed years where the worker's contract of service is terminated on the ground of serious and wilful misconduct on the part of the worker; or the contract of service is unlawfully terminated by the worker.22 For reasons that are outlined below, I do not consider that this factor played any role in the decision to dismiss the Applicant.
5.2 Job no longer required by the employer due to changes in operational requirements of the employer’s enterprise
[69] For reasons previously outlined, when consideration is given to whether changes in the operational requirements means that the person's job is no longer required to be performed by anyone, the test is not whether the particular duties performed by the dismissed employee survive the changes. Duties can be permissibly redistributed to other employees. The question is whether the job previously performed by the Applicant still exists.
[70] Further, the process of selecting which individual employee is to be made redundant is not relevant to determining whether a dismissal is a genuine redundancy, provided that the job is not required due to the operational changes and the other requirements of s.389 of the Act are met. 23
[71] I am satisfied that there were changes in the operational requirements of Rivergum’s enterprise in the lead up to the dismissal. The immediate restrictions brought about by the Governments’ responses to the COVID-19 Pandemic, the prudent response by Rivergum in relation to the operation of the display villages and associated matters, and more significantly, concerns about the unknown length of restrictions and the degree of impact upon the pipeline of sales and future revenue, led to a decision to significantly reduce the size of the sales workforce. Given the lead time until lost income flowing from the significant reduction in foot traffic to the sales villages would be felt by the business, Rivergum determined that it would immediately reduce staffing at its villages where possible and eliminate other positions to reduce present costs and future committed costs.
[72] I am also satisfied that the job occupied by Mr Claessen-Smith was no longer required by Rivergum. The job was fundamentally focused upon the Parafield sales village and whilst the village still operated at the time, it was not open for walk-ins, but rather by appointment. This and other initiatives taken by Rivergum to increase its on-line sales presence led to a reduced need for staffing at the Village and the requirement that generally only 1 person needed to be at the Village, when it was being staffed. Relief attendance was provided by other employees from time to time, but not so that there were generally two staff members on site at the same time, as had previously been the case. Some of the sales duties were also undertaken by others, however the evidence is that the number of positions involved in the new home sales roles declined, including the loss of the position occupied by Mr Claessen-Smith.
[73] Further, I am also satisfied that the job was no longer required due to the operational changes. In that regard, I find that the decision to reduce the number of jobs in the new home sales roles, including that of Mr Claessen-Smith, was not motivated by concerns about the Applicant’s upcoming LSL entitlements or by the fact that he was on sick leave. The evidence provided by Rivergum on this aspect was objectively convincing, consistent with the prevailing circumstances and not successfully challenged. Further, I observe that by selecting Mr Claessen-Smith for redundancy, given his length of service, this meant that the redundancy payment was greater than it would otherwise have been.
[74] I do accept that Rivergum might have approached the selection of the employees for potential redundancy differently. It applied a display village by display village approach rather than looking across all of its sales workforce and determining potential redundancies on that basis. However, it is clear that it made the decision to reduce the staffing at the Parafield display village back to the staffing levels generally operating elsewhere and determined that it would retain the highest sales earner at that village. Mr Claessen-Smith and his other sales colleague, were selected for redundancy and this is the reason that the position was no longer required. It is also clear that the job occupied by Mr Claessen-Smith was no longer to be performed by anyone. The overall staffing at the village was reduced and two sales positions removed. The fact that subsequently some additional sales resource was added within the Rivergum group as circumstances changed, including in the form of a casual sales host, does not change that outcome.
[75] It is also clear that Rivergum acted upon the information as known at that time. It may well be that subsequent events have meant that the actual impact on future sales and building contracts has not been significant given the speed with which the South Australian economy has opened up and the positive impact of Commonwealth Government house sales initiatives and other economic supports. However, the nature of the redundancy must be assessed based upon the circumstances at the time that it occurred.
[76] To the extent that Mr Claessen-Smith suggests that one of the reasons for his dismissal was a desire by Rivergum to replace him with sales staff with lower commission arrangements, the evidence does not support this as a motivation or as the result.
[77] On the basis of the above findings I am satisfied that Rivergum has demonstrated the first element of a genuine redundancy under s.389(1)(a) of the Act.
5.3 Compliance with consultation requirements of a modern award or enterprise agreement
[78] Section 389(1)(b) of the Act requires consideration as to whether the employer has complied with any obligation in a modern award (or enterprise agreement) 24 that applied to the employment to consult about the redundancy. The Act itself defines when a modern award applies to an employer and their employee in the following terms:
“47 When a modern award applies to an employer, employee, organisation or outworker entity
When a modern award applies to an employee, employer, organisation or outworker entity
(1) A modern award applies to an employee, employer, organisation or outworker entity if:
(a) the modern award covers the employee, employer, organisation or outworker entity; and
(b) the modern award is in operation; and
(c) no other provision of this Act provides, or has the effect, that the modern award does not apply to the employee, employer, organisation or outworker entity.
Note 1: Section 57 provides that a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment.
Note 2: In a modern award, coverage of an outworker entity must be expressed to relate only to outworker terms: see subsection 143(4).
Modern awards do not apply to high income employees
(2) However, a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) at a time when the employee is a high income employee.
Modern awards apply to employees in relation to particular employment
(3) A reference in this Act to a modern award applying to an employee is a reference to the award applying to the employee in relation to particular employment.”
[79] Section 48 of the FW Act defines when a modern award covers these parties as follows:
“48 When a modern award covers an employer, employee, organisation or outworker entity
When a modern award covers an employee, employer, organisation or outworker entity
(1) A modern award covers an employee, employer, organisation or outworker entity if the award is expressed to cover the employee, employer, organisation or outworker entity.
Note: In a modern award, coverage of an outworker entity must be expressed to relate only to outworker terms: see subsection 143(4).
Effect of other provisions of this Act, FWC orders or court orders on coverage
(2) A modern award also covers an employee, employer, organisation or outworker entity if any of the following provides, or has the effect, that the award covers the employee, employer, organisation or outworker entity:
(a) a provision of this Act or of the Registered Organisations Act;
(b) an FWC order made under a provision of this Act;
(c) an order of a court.
(3) Despite subsections (1) and (2), a modern award does not cover an employee, employer, organisation or outworker entity if any of the following provides, or has the effect, that the award does not cover the employee, employer or organisation or outworker entity:
(a) a provision of this Act;
(b) an FWC order made under a provision of this Act;
(c) an order of a court.
Modern awards that have ceased to operate
(4) Despite subsections (1) and (2), a modern award that has ceased to operate does not cover an employee, employer, organisation or outworker entity.
Modern awards cover employees in relation to particular employment
(5) A reference to a modern award covering an employee is a reference to the award covering the employee in relation to particular employment.”
[80] As a result, although the Retail Award is cited in Mr Claessen-Smith’s employment contract and in the Respondent’s response to this application, it appears that the consultation obligations for the purposes of s.389(1)(b) are dependent upon the Retail Award, or the Miscellaneous Award, applying (and covering) his employment by virtue of the stated coverage of the relevant Awards. I note in that regard that there is no suggestion that the terms of the Act would otherwise operate to remove Mr Claessen-Smith from coverage. 25
[81] It is therefore necessary to consider the expressed coverage of the two modern awards concerned.
[82] Clause 4 of the Retail Award provides that it covers employers in the general retail industry and their employees in the classifications listed within the award. 26 Clause 3 of that award defines the general retail industry in the following terms:
“general retail industry means the sale or hire of goods or services to final consumers for personal, household or business consumption including:
• food retailing, supermarkets, grocery stores;
• department stores, clothing and soft goods retailing;
• furniture, houseware and appliance retailing;
• recreational goods retailing;
• personal and household goods retailing;
• household equipment repair services;
• bakery shops, where the predominant activity is baking products for sale on the premises;
and includes:
• customer information and assistance provided by shopping centres or retail complexes;
• labour hire employees engaged to perform work otherwise covered by this award; and
• newspaper delivery drivers employed by a newsagent,
but does not include:
• community pharmacies;
• pharmacies in hospitals and institutions providing an in-patient service;
• hair and beauty establishments;
• hair and beauty work undertaken in the theatrical, amusement and entertainment industries;
• stand-alone butcher shops;
• stand-alone nurseries;
• retail activities conducted from a manufacturing or processing establishment other than seafood processing establishment;
• clerical functions performed away from the retail establishment;
• warehousing and distribution;
• motor vehicle retailing and motor vehicle fuel and parts retailing;
• fast food operations;
• restaurants, cafes, hotels and motels; or
• building, construction, installation, repair and maintenance contractors engaged to perform work at a retail establishment.”
[83] The classifications referenced in clause 16 and set out in schedule B of the Retail Award include various levels of Retail Employee commencing with the Retail Employee Level 1 as follows:
“B.1 Retail Employee Level 1
B.1.1 An employee performing one or more of the following functions at a retail establishment:
• the receiving and preparation for sale and or display of goods in or about any shop;
• the pre-packing or packing, weighing, assembling, pricing or preparing of goods or provisions or produce for sale;
• the display, shelf filling, replenishing or any other method of exposure or presentation for sale of goods;
• the sale or hire of goods by any means;
• the receiving, arranging or making payment by any means;
• the recording by any means of a sale or sales;
• the wrapping or packing of goods for despatch and the despatch of goods;
• the delivery of goods;
• window dressing and merchandising;
• loss prevention;
• demonstration of goods for sale;
• the provision of information, advice and assistance to customers;
• the receipt, preparation, packing of goods for repair or replacement and the minor repair of goods;
• all directly employed persons engaged in retail stores in cleaning, store greeting, security, lift attending, store cafeterias and food services;
• Clerical Assistants functions Level 1; or
• work which is incidental to or in connection with any of the above.
B.1.2 Retail Employees will undertake duties as directed within the limits of their competence, skills and training including incidental cleaning. The cleaning of toilets is not incidental cleaning except in the case of a take away food establishment.
B.1.3 Indicative job titles which are usually within the definition of a Retail Employee Level 1 are:
• Shop Assistant,
• Clerical Assistant,
• Check-out Operator,
• Store Worker,
• Reserve Stock Hand,
• Driver,
• Boot/Shoe Repairer (Not Qualified),
• Window Dresser (Not Qualified),
• LPO,
• Photographic Employee,
• Store Greeter,
• Assembler,
• Ticket Writer (Not Qualified),
• Trolley Collector,
• Video Hire Worker,
• Telephone Order Salesperson,
• Door-to-door Salesperson, or Retail Outdoor Salesperson, and,
• Demonstrator and/or Merchandiser not elsewhere classified (including a Demonstrator and/or Merchandiser who is not a direct employee of the retailer).
B.1.4 Clerical Assistant means an employee accountable for clerical and office tasks as directed within the skill levels set out.
B.1.5 Employees at this level may include the initial recruit who may have limited relevant experience. Initially work is performed under close direction using established practices, procedures and instructions.
B.1.6 Such employees perform routine clerical and office functions requiring an understanding of clear, straightforward rules or procedures and may be required to operate certain office equipment. Problems can usually be solved by reference to established practices, procedures and instructions.
B.1.7 Employees at this level are responsible and accountable for their own work within established routines, methods and procedures and the less experienced employee’s work may be subject to checking at all stages. The more experienced employee may be required to give assistance to less experienced employees in the same classification.
B.1.8 Indicative typical duties and skills at this level may include:
• reception/switchboard, e.g. directing telephone callers to appropriate staff, issuing and receiving standard forms, relaying internal information and initial greeting of visitors;
• maintenance of basic records;
• filing, collating, photocopying etc;
• handling or distributing mail including messenger service;
• recording, matching, checking and batching of accounts, invoices, orders, store requisitions etc; or
• the operation of keyboard and other allied equipment in order to achieve competency as prescribed in Level 2.”
[84] The subsequent Retail Employee levels build upon this stated definition and further indicative roles are also set out up to Level 6.
[85] The classifications also include Clerical Assistant and Clerical Officer progressing up to Level 5 Clerical Officer, with such being stated in the following terms:
“B.8.4 Clerical Officer Level 5 characteristics:
• Employees at this level are subject to broad guidance or direction and would report to more senior staff as required.
• Such employees will typically have worked or studied in a relevant field and will have achieved a standard of relevant and/or specialist knowledge and experience sufficient to enable them to advise on a range of activities and features and contribute, as required, to the determination of objectives, within the relevant field(s) of their expertise.
• They are responsible and accountable for their own work and may have delegated responsibility for the work under their control or supervision, in terms of, among other things, scheduling workloads, resolving operations problems, monitoring the quality of work produced as well as counselling staff for performance as well as work related matters.
• They would also be able to train and to supervise employees in lower levels by means of personal instruction and demonstration. They would also be able to assist in the delivery of training courses. They often exercise initiative, discretion and judgment in the performance of their duties.
• The possession of relevant post secondary qualifications may be appropriate but not essential.
B.8.5 Indicative typical duties and skills at this level may include:
• Apply knowledge of organisation’s objectives, performance, projected areas of growth, product trends and general industry conditions.
• Application of computer software packages within either a micropersonal computer or a central computer resource including the integration of complex word processing/desktop publishing, text and data documents.
• Provide reports for management in any or all of the following areas:
(i) account/financial
(ii) staffing
(iii) legislative requirements
(iv) other company activities.
• Administer individual executive salary packages, travel expenses, allowances and company transport; administer salary and payroll requirements of the organisation.”
[86] Mr Claessen-Smith’s role was in essence to sell contracts for houses, and house and land packages) to be constructed by Rivergum. The customers were generally members of the public. Amongst other steps this could involve showing customers through the display home or homes, explaining the contract and building approval processes, working out quotations and discussing matters included in the quote and various selections and options available. The role may also include follow-up work with customers through the contract and building process related to these and associated matters.
[87] I consider that it is unlikely that Rivergum operates in the general retail industry as contemplated by the Retail Award. Although clearly arguable, the sale of contracts for the building of new house construction may not be contemplated by the scope and context in which this modern award operates. The application of the classifications in that award to his role is perhaps also problematic. As a result, whilst for reasons outlined above the Retail Award forms part of Mr Claessen-Smith’s contract and may be enforceable for other purposes, it is not clear that this award applied to him for present purposes.
[88] The alternative more fully advanced by Mr Claessen-Smith was that the Miscellaneous Award applied and he relied upon the decision of the Federal Circuit Court in Fair Work Ombudsman v Longridge Group Pty Ltd 27 (Longridge) in that respect.
[89] The coverage of the Miscellaneous Award at the time of the Applicant’s dismissal 28 was in the following terms:
“4. Coverage
4.1 Subject to clauses 4.2, 4.3, 4.4, 4.5 and 4.6 this award covers employers throughout Australia and their employees in the classifications listed in clause 14—Minimum wages who are not covered by any other modern award.
4.2 The award does not cover those classes of employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.
4.3 The award does not cover employees:
(a) in an industry covered by a modern award who are not within a classification in that modern award; or
(b) in a class exempted by a modern award from its operation,
or employers in relation to those employees.
4.4 The award does not cover employees excluded from award coverage by the Act.
4.5 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.
4.6 The award does not cover employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.
4.7 This award covers any employer which supplies on-hire employees in classifications set out in Schedule B and those on-hire employees, if the employer is not covered by another modern award containing a classification which is more appropriate to the work performed by the employee. This subclause operates subject to the exclusions from coverage in this award.
4.8 This award covers employers which provide group training services for apprentices and trainees under this award and those apprentices and trainees engaged by a group training service hosted by a company to perform work at a location where the activities described herein are being performed. This subclause operates subject to the exclusions from coverage in this award.”
[90] Clause 4.1 links the coverage of the award to its classification structure. The classification structure and definitions are set out in Schedule B to the Miscellaneous Award as follows:
Level 1
An employee at this level has been employed for a period of less than three months and is not carrying out the duties of a level 3 or level 4 employee.
Level 2
An employee at this level has been employed for more than three months and is not carrying out the duties of a level 3 or level 4 employee.
Level 3
An employee at this level has a trade qualification or equivalent and is carrying out duties requiring such qualifications.
Level 4
An employee at this level has advanced trade qualifications and is carrying out duties requiring such qualifications or is a sub-professional employee.
[91] The scope of the Miscellaneous Award was considered by a Full Bench in United Voice v Gold Coast Kennels Discretionary Trust t/as AAA Pet Resort 29where the question to be determined in the appeal required it to construe the coverage provisions in clause 4 of the Miscellaneous Award – in particular, the exclusion from coverage contained in clause 4.2. In undertaking this task, the Full Bench said:
“[36] We have earlier set out clause 4.2 of the Miscellaneous Award, which establishes the exception from the general coverage provision in clause 4.1 which AAA Pet Resort relies upon to avoid the proposition that the award covers the Employees. It is necessary at the outset therefore to construe clause 4.2 having regard to its context and purpose. Before we turn directly to the text of clause 4.2, two observations may be made about the apparent purpose of the Miscellaneous Award based on the context of the award’s terms as a whole. First, the title of the award, the terms of clause 4.1, and the broad and generic nature of the classifications descriptors in Schedule B suggest that the purpose of the award is to provide minimum (and minimalistic) conditions of employment for a miscellaneous range of employers and employees, not identified by reference to any industry, business function or occupation, who are not covered by any other modern award. Second, the classifications descriptors make it clear that no classification applies to persons with a professional qualification or managerial responsibilities, that Levels 3 and 4 were to apply to trade-qualified employees, and that Levels 1 and 2 were to apply to low-skilled employees with no particular work qualification at all. Thus it may be inferred that the award was not intended to cover professional or managerial employees, and that it was intended to cover low-skilled employees as well as trade-qualified employees not covered by any other award. In respect of low-skilled employees, the low minimum rates of pay prescribed also tend to suggest that the award was intended to capture low paid workers not covered by another award.
[37] We consider that clause 4.2 has a plain meaning based on the ordinary meaning of the words used. The exclusion in clause 4.2 has two requisite elements. Stated in reverse order, they are:
(1) the classes of employees must not have been traditionally covered by awards; and
(2) this must have been because of the nature or seniority of their role.
[38] That is, it is not sufficient for the exclusion to apply that a particular class of employees has not traditionally been covered by awards where this is not attributable to the nature or seniority of the employees’ role.
[39] It may be accepted, as submitted by AAA Pet Resort, that the remainder of clause 4.2, “...including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists”, cannot be read as exhaustively stating the scope of the exclusion. Nonetheless it is plain that the identified classes of employees are intended both to serve as examples to guide the interpretation and application of the clause and to constitute the principal classes of employees excluded. Thus “managerial employees” are a class of employees traditionally excluded from award coverage because of the “seniority of their role”, and the other identified classes are specialist white collar professionals traditionally not covered because of the “nature ... of their role”. To read the clause this way is consistent with the overall context of the award to which we have referred, including the lack of any classifications applicable to managerial or professional employees.”
[92] I note that in Longridge as cited on behalf of the Applicant, the respondent’s business was the construction and sale of new residential homes, and that the employees concerned were employed by Longridge to sell homes on a commission basis. This is similar to the work in question here and the Court determined penalties for certain breaches of the FW Act by reference to the Miscellaneous Award. However, the parties agreed 30 that this work was covered by the Miscellaneous Award and the Court was not required to determine this aspect.
[93] Very little by way of submissions has been advanced on this aspect of the matter. This includes the absence of material about any history of award coverage (or the lack thereof) for sales staff in positions akin to that occupied by Mr Claessen-Smith or submissions about the professional nature of such a role.
[94] In this context, I have proceeded on the basis that a modern award may have applied to Mr Claessen-Smith for present purposes; however, given that I have found that any relevant consultation obligations were met in any event, it has ultimately not been necessary for me to finally determine this particular issue.
[95] The relevant consultation clause of each Award provided as follows:
“8. Consultation about major workplace change
8.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:
(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and
(b) discuss with affected employees and their representatives (if any):
(i) the introduction of the changes; and
(ii) their likely effect on employees; and
(iii) measures to avoid or reduce the adverse effects of the changes on employees; and
(c) commence discussions as soon as practicable after a definite decision has been made.
8.2 For the purposes of the discussion under clause 8.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
(a) their nature; and
(b) their expected effect on employees; and
(c) any other matters likely to affect employees.
8.3 Clause 8.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.
8.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 8.1(b).
8.5 In clause 8:
significant effects, on employees, includes any of the following:
(a) termination of employment; or
(b) major changes in the composition, operation or size of the employer’s workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(d) loss of, or reduction in, job tenure; or
(e) alteration of hours of work; or
(f) the need for employees to be retrained or transferred to other work or locations; or.
(g) job restructuring.
8.6 Where this award makes provision for alteration of any of the matters defined at clause 8.5, such alteration is taken not to have significant effect.”
[96] To satisfy s.389(1)(b), and subject to the caveat above, I must consider whether Rivergum has complied with this consultation obligation in relation to Mr Claessen-Smith’s redundancy.
[97] Clause 8 is a standard provision found in most modern awards. Its origins and intent were explained, in part, by the Full Bench in Consultation Clause in Modern Awards31 as follows:
“[30] The word ‘consult’ means more than the mere exchange of information. As Young J said in Dixon v Roy:
“The word ‘consult’ means more than one party telling another party what it is that he or she is going to do. The word involves at the very least the giving of information by one party, the response to that information by the other party, and the consideration by the first party of that response.” [citations omitted]
[31] The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality. Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):
“... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.
To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that?”. Only in the latter case is there “consultation.”
[32] We respectfully adopt his Honour’s observations. Similar to the obligation to accord a person procedural fairness, the precise content of an obligation to consult will depend on the context. The extent and significance of a proposed change, in terms of its impact on the affected employees, will have a bearing on the extent of the opportunity to be provided. Hence a change of limited duration to meet unexpected circumstances may mean that the opportunity for affected employees to express their views may be more limited than would be the case in circumstances where the proposed change is significant and permanent. It is also relevant to note that while the right to be consulted is a substantive right, it does not confer a power of veto. Consultation does not amount to joint decision making.
[33] Some of the ordinary incidents of a requirement to consult are reflected in s.145A(2), that is:
• to provide information about the change; and
• to provide an opportunity for affected employees to give their views about the impact of the change; and
• to consider any views about the impact of the change that are given by the employees.” [Citations omitted]
[98] The duty to consult under clause 8 is in relation to major changes, including to the organisation and structure of the workplace, that is likely to have significant effects on employees as defined in subclause 8.5. There can be little doubt that the review of sales staffing levels leading to the dismissal of Mr Claessen-Smith in this case was a major change that was likely to have significant effects. As a result, clause 8 would have required that Rivergum:32
• Give notice, in writing, to the employees who may be affected after it has made a definite decision to make the relevant major change.
• Provide in the written notice all relevant information about the changes including their nature, their expected effect on employees; and any other matters likely to affect employees.
• Commence discussions with the relevant employees as soon as practical after the definite decision has been made.
• Discuss the introduction of the changes, their likely effect on employees, and measures to avoid or reduce the adverse effects of the changes on employees through a process that provides the affected employees with a genuine opportunity to advance their perspectives.
• Promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 8.1(b).
[99] Amongst other matters, the following took place with respect to consultation leading to the final decision to make the Applicant redundant:
• Prior to the consideration of Mr Claessen-Smith’s redundancy, Rivergum advised the employees in writing, including the Applicant, about the general impact of the pandemic upon the business and the general operational changes, including in relation to the operation of the display villages, it was proposing and implementing. There were also discussions with staff and the opportunity to provide feedback or seek clarification and support. Up until the events below, this did not include the fact of redundancies being required.
• On 31 March 2020, Mr O’Reilly wrote to Mr Claessen-Smith in the following terms:
“Further to our conversation regarding COVID-19, Rivergum Homes Group are cutting back its sales operations from 1st April 2020 to secure the financial viability of our business during this difficult period. As a result, the Parafield Display Village will be partially closed. It is unknown at this stage when it will re-open fully, and there are no other appropriate roles available for redeployment at present.
From 1st April 2020, we request that you take your annual leave entitlements of 20 days and leave without pay thereafter.
We will review this decision in 30 days.
Rivergum Homes Group regret that this action had to be taken but assure you that if circumstances change your working week will be resumed.
… …” 33
• Mr O’Reilly contacted Mr Claessen-Smith on 14 April 2020 and invited him to a meeting on 15 April 2020 via Zoom. At the Applicant’s request this meeting was rearranged for 17 April 2020 and to be held in person with Mr Claessen-Smith’s Solicitor present. In conjunction with the direct invitation on 14 April, Mr O’Reilly forwarded a letter to the Applicant which included the following:
“As you are aware from the conversation held with you today, Rivergum Homes Group is currently reviewing its operational and financial requirements as a result of COVID-19. An outcome of this review is that your position of New Home Consultant will no longer be required beyond the date of 15th April 2020 and accordingly is to be made redundant.
Unfortunately, after giving your situation proper consideration, we have not been able to identify any redeployment opportunities for you within Rivergum Homes.
You are invited to comment on the proposed redundancy, including any ways that its impact can be mitigated or avoided. Accordingly, we would like to meet with you again on 15th April 2020 to consider any response you have to your proposed redundancy. You may also respond to me in writing and bring a support person to this meeting if you wish.
Should no other alternatives be found following this meeting and any other discussion with you, your redundancy will be confirmed and the details finalised.
Your termination pay, if the redundancy is confirmed, will also include:
• 4 weeks' notice period
• 11 weeks' redundancy pay, in recognition and appreciation of your length of service
• Payment for any accrued but untaken annual leave entitlements
• Any unpaid salary due
Rivergum Homes Group appreciates that this is a difficult time for you and encourages you to contact me at any time, should you have any questions or concerns regarding the above.” 34
• At the meeting conducted on 17 April 2020, Mr Claessen-Smith attended with his Solicitor. Rivergum was represented by Mr O’Reilly and an external Human Resource Consultant. Amongst other matters, the following was discussed:
• Rivergum stated that it had determined that for operational reasons, Mr Claessen-Smith’s position was impacted by the COVID 19 response, and may be made redundant. It requested the Applicant to propose any measures which could be taken to reduce the impacts on him, including whether he thought that he could work in a different position.
• Mr Claessen-Smith disagreed with the proposal to make his position redundant and proposed he work in drafting/estimating or planning roles. He also asserted, in effect, that he was an exemplary employee and had an excellent sales performance record and should not be let go.
• Mr Claessen-Smith’s solicitor then raised his upcoming entitlement to long service leave.
• In response to the Applicant’s characterisation of his performance, Rivergum raised some performance and conduct concerns including that the Applicant was on a Performance Improvement Plan.
• It was agreed that the next meeting would be held on 20 April 2020.
• After the meeting on 17 April 2020, Mr O’Reilly and Mr Lee discussed whether there was an alternative position for Mr Claessen-Smith, including his proposal that he work in a drafting/estimating or planning role. Noting that the Drafter had already been requested to go on leave and this position was itself under review, 35 their view that Mr Claessen-Smith did not have the technical skills to work in the construction part of the business, and there has been no Planner roles in the business for at least 12 months, they determined that there were no other positions he could be redeployed to and that his employment would need to be terminated for reasons of redundancy.
• Mr Claessen-Smith was advised of his redundancy at the subsequent meeting held on 20 April 2020.
[100] Given the context in which this occurred, including the prior information provided to all employees about the operational issues and the capacity for Mr Claessen-Smith to advance alternatives and to have his perspective genuinely taken into account, I am satisfied that Rivergum has met the relevant consultation obligations. In this regard, I observe that the consultation obligations require that the information, including the foreshadowed consequences, be provided and the consultation occur after a definite decision to make the major (organisational) change has been made. This was the context for the process set out above. I accept that this had a tendency to make the consultation look to Mr Claessen-Smith as being disingenuous; however, the objective evidence supports Rivergum’s contentions as found above.
[101] Accordingly, and assuming for present purposes that a modern award consultation obligation applied, I am satisfied that the requirements of s. s.389(1)(b) of the Act have been met in this matter.
5.4 Reasonable redeployment
[102] The precise test established by s.389(2) of the Act in this case is whether it would have been reasonable in all of the circumstances for the person, Mr Claessen-Smith, to have been redeployed within the employer’s enterprise (Rivergum) or the enterprise of an associated entity (the Rivergum group). A finding that it was reasonable would mean that there was not a genuine redundancy. For reasons outlined earlier, this involves consideration of all relevant circumstances at the time of the dismissal.
[103] Further, in making that assessment, the Commission must find on the balance of probabilities, that there was a job or a position or other work within the employer's enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must be an appropriate evidentiary basis for such a finding.36 The job or jobs concerned must also be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or within a reasonable period of retraining.37
[104] Rivergum did not have any vacancies at the time and the assessment of redeployment options was taking place in the context of 11 other redundancies and the uncertainty created by the COVID-19 pandemic at that time. The Respondent did consider whether it should, in effect, displace one of the other New Home Sales staff, and whether it was feasible to redeploy Mr Claessen-Smith in a planning, technical or other role, including in Victoria where there were also no vacancies. This was appropriate but it is the reasonableness of any potential redeployment that must be determined by the Commission.
[105] In closing submissions, 38 Mr Claessen-Smith has contended that the Assistant Sales Manager position or any one of the “probationary” or “casual” roles were examples of redeployment options that should have been provided. In evidence, he also contended that he would have considered a position within the Victorian operations of the Rivergum group; however, this was not raised at the time and I do not consider that his evidence in that regard was convincing.
[106] In any event, for reasons outlined above I have also considered the broader circumstances based upon the evidence to objectively ascertain whether it have been reasonable to redeploy the Applicant at the time of his redundancy. This reference point is important because later events did change the circumstances in which the business was operating.
[107] At the time, there were no vacancies in a sales role. I do not consider that it would have been reasonable to terminate other full-time employees to make a vacancy and I do not consider that it would have been reasonable to redeploy Mr Claessen-Smith into one of the other positions that he raised at the time or during these proceedings. The later additional sales roles were not a substitute for the Applicant’s job and in any event were not reasonable redeployment roles at the time of the redundancy.
[108] I do accept that Mr O’Reilly and Mr Lee may not have been aware that Mr Claessen-Smith did have some tertiary training in planning and some relatively limited planning and drafting experience. However, the drafting role was under review at the time and I observe that it was subsequently itself made redundant. The employer also had no general planning role or vacancy to place the Applicant into in that context.
[109] Prior to the impact of the COVID-19 pandemic, Rivergum engaged an independent contractor who acted as a builder broker. This contractor also undertook work for other builders and was a different form of contractual and business relationship than existed with the sales staff. This role continued and I whilst there was some overlap in sales functions, I do not consider that this was a reasonable redeployment option for the Applicant given the nature of that role.
[110] Mr Claessen-Smith did not contend that the BDM position was itself a reasonable redeployment option given that it was not filled until 1 July 2020. That concession was appropriate.
[111] The evidence is that the Assistant Manager role was not a new position. Rather, it arose as an additional resource for the General Manager who took on the combined sales and marketing role after the other General Manager was made redundant. There was no vacant or additional position into which Mr Claessen-Smith should have been redeployed into at the relevant time. The evidence is also that there were no casual employees at the time of the redundancies but that there were some employees in probationary positions. I do not discount that reasonable redeployment options might involve taking the functions undertaken by external labour hire or potentially employees without an ongoing contract where a suitable position existed. However, the roles must be real and suitable in line with the authorities outlined earlier in this decision. In this case, the employees that were in the probationary positions were in the technical side of the business and I am satisfied that these were not suitable redeployment options given the circumstances including the nature of those roles and the training and experience of Mr Claessen-Smith. I have earlier deal with the drafting and planning options that might have been a better fit for the Applicant.
[112] As a result, and having regard to the earlier findings on this aspect, on balance I find that it would not have been reasonable in all of the circumstances for Mr Claessen-Smith to have been redeployed within the employer’s enterprise or the enterprise of an associated entity.
[113] Given my earlier findings, this means that Rivergum has demonstrated that all of the requirements of s.389(2) of the Act have been met.
5.6. Conclusions on the jurisdictional issue
[114] Given the above findings, I am satisfied that Mr Claessen-Smith’s dismissal was a case of genuine redundancy within the meaning of s.389 of the Act.
6. Conclusions and order
[115] Section 385 of the Act provides as follows:
“385 What is an unfair dismissal
(1) 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.”
[116] As a result of my findings in this matter and the operation of s.385(1)(d), a finding that Mr Claessen-Smith was unfairly dismissed is not available and there is no jurisdiction for the Commission to make that assessment.
[117] Accordingly, the unfair dismissal application must itself be dismissed and an Order 39 to that end is being issued in conjunction with this Decision.
COMMISSIONER
Appearances:
T Campbell of Campbell Law, with permission, for Jordan Claessen-Smith, the Applicant.
K Smith of EMA Legal, with permission, for Rivergum Homes Pty Ltd, the Respondent.
Hearing details:
2020
August 19, 20
Via Video Hearing.
Printed by authority of the Commonwealth Government Printer
<PR721877>
1 Section 395 of the Act provides, in effect, that a dismissal cannot be unfair if it is found to be a case of genuine redundancy.
2 Section 396 of the Act provides that certain matters must be decided before considering the merits of an application and the issue of genuine redundancy is one such case.
3 See Teterin and others v Resource Pacific Pty Limited t/a Ravensworth Underground Mine[2014] FWCFB 4125 at [27] to [29] and [32].
4 (2010) 196 IR 32.
5 (1995) 60 IR 304.
6 Ibid at 308.
7 Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.
8 [2016] FWCFB 7202.
9 [2016] FWCFB 7202.at [14].
10 Ulan Coal Mines Limited v Honeysett and others[2010] FWAFB 7578 (2010) 199 IR 363
11 Technical and Further Education Commission T/A TAFE NSW v L. Pykett[2014] FWCFB 714.
12 This latter suggestion was not expressly maintained in final submissions.
13 I have not included the names of the non-managerial employees for privacy reasons.
14 Memorandum to staff, 16 March 2020 – pgs. 46 to 48 of the Common book of documents.
15 Email to staff, 23 March 2020 – pgs. 50 to 52 of the Common book of documents.
16 Email to staff from Mr Lee, 25 March 2020 – pg. 55 of the Common book of documents.
17 Email to staff from Mr Lee, 29 March 2020 – pgs. 57 and 58 of the Common book of documents.
18 Email to staff from Mr Lee, 31 March 2020 – pgs. 59-60 of the Common book of documents.
19 Rivergum understood that a 30% reduction in revenue was required for a business of its size and nature.
20 Announced in early June 2020.
21 Long Service Leave Act 1987 (SA), which applies by virtue of s.27(2)(g) of the Act.
22 Ibid at s.5(4).
23 See also Jain v Infosys Limited[2014] FWCFB 5595.
24 Not applicable in this matter.
25 The Awards were each in operation at the time, Mr Claessen-Smith was not a high-income earner as defined and was not subject to an enterprise agreement.
26 The Retail Award excludes from coverage parties covered by some named modern awards that are not relevant here.
27 [2015] FCCA 129.
28 A revised and extended scope provision was added with effect from 1 July 2020 – see 4 yearly review of modern awards – Miscellaneous Award 2010 [2020] FWCFB 1589.
29 [2018] FWCFB 128.
30 [2018] FWCFB 128 at [29] and [81].
31 [2013] FWCFB 10165.
32 There is no indication that Rivergum relied upon the exclusion of confidential information outlined in clause 8.3.
33 Book of documents at pg 61. Mr Claessen-Smith subsequently took personal leave for reasons set out earlier.
34 Book of documents at pg 69.
35 This position was also subsequently made redundant.
36 Technical and Further Education Commission T/A TAFE NSW v Pykett[2014] FWCFB 714 at para [36].
37 Ibid and Ulan Coal Mines Limited v Honeysett[2010] FWAFB 7578 at para [34].
38 Transcript PN1580 to 1586.
39 PR722722.
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