Josua Wessels v Midwest Vanadium Pty Ltd
[2014] FWCFB 6873
•1 OCTOBER 2014
| [2014] FWCFB 6873 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Midwest Vanadium Pty Ltd
(C2014/5508)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN | ADELAIDE, 1 OCTOBER 2014 |
Appeal against decision [2014] FWC 4514 of Commissioner Cloghan at Perth on 10 July 2014 in matter number U2014/1035 - requirement to hold a conference or hearing - genuine redundancy - consultation obligations - public interest - utility in appeal.
[1] This decision concerns an appeal lodged by Mr Wessels against a decision and order 1 made by Commissioner Cloghan on 10 July 2014. In that decision the Commissioner dismissed an unfair dismissal application made by Mr Wessels pursuant to s.394 of the Fair Work Act 2014 (the FW Act) on the basis that the termination of Mr Wessels’ employment by Midwest Vanadium Pty Ltd was a case of genuine redundancy.
[2] Mr Wessels has lodged an appeal against that decision. In the appeal Mr Wessels was represented by Mr Mullally and Midwest Vanadium Pty Ltd (Midwest), by Mr Bourke, of counsel. Grants of permission were made pursuant to s.596(2)(a) of the FW Act.
The Background
[3] Mr Wessels’ unfair dismissal application was made on 31 March 2014. Before the Commissioner, Midwest argued that the termination of his employment was a case of genuine redundancy and that therefore Mr Wessels was not able to pursue the application.
[4] Before setting out the background to the matter, we note that the following legislative provisions are relevant.
[5] Section 385 of the FW Act states:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[6] Section 389 states:
“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] We also note that there is no dispute that Mr Wessels’ employment was covered by the Mining Industry Award 2010. The relevant provisions of that award state:
“8.1 Consultation regarding major workplace change
(a) Employer to notify
(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.
(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.
(b) Employer to discuss change
(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.
(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1(a).
(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.”
[8] The background to the matter is summarised in the Commissioner’s decision, in the following terms: 2
“[10] The Employer is the owner and operator of the Windimurra vanadium and iron ore operation near Mount Magnet in Western Australia.
[11] On 4 February 2014, the operation suffered a serious fire in its beneficiation plant. The beneficiation plant was not operating at the time of the fire as it was undergoing planned maintenance. The fire caused the cessation of the planned recommencement of production.
[12] Production of vanadium and iron ore at the plant in February 2014 was nil.
[13] The Employer is a subsidiary of Atlantic Ltd (Atlantic).
[14] On 4 February 2014, Atlantic advised the Australian Stock Exchange (ASX) that it could take approximately nine (9) months to rebuild the beneficiation plant. Further, it was estimated that the insurance claim could be in the order of $100m.
[15] A condition of the Employer’s business interruption insurance policy is that the Employer must minimise its expenses during the interruption period. This condition is monitored by the Insurer and was a significant “driver” behind the Employer’s reduction of contractors and employee workforce.
[16] On 26 February 2014, the Employer began to stand down employees because there was no work for them to undertake at the plant. At this time, the Employer was determining what actions could be undertaken and obtaining funds to carry out those actions.
[17] On 21 March 2014, Atlantic advised the ASX that approximately “90 employees had been made redundant in view of the anticipated time before the rebuild of the beneficiation plant will be complete and normal production can resume”.
[18] The Applicant was “formally stood down on 26th February on full pay as production at the site had to stop”.
[19] The Applicant was one of approximately 90 employees of the Employer’s 213 employees made redundant.
[20] Further, the Applicant was one of 16 Mechanical Fitters who were made redundant. The Employer employed 27 Mechanical Fitters.
[21] The Applicant had been employed by the Employer as a Mechanical Fitter since 23 July 2012. For four (4) months prior to commencing as an employee, Mr Wessels was engaged by the Employer as a contractor.
[22] On 17 March 2014, the Applicant met with the Maintenance Manager and was advised that the Employer had “a budget to work to and it could not keep everybody on”. Mr Wessels was provided with a letter of termination of employment for reasons of redundancy due to the fire at the beneficiation plant.”
[9] The Commissioner’s decision addressed the legislative provisions generally, before considering s.389 specifically. He found that Midwest no longer required Mr Wessels’ job to be carried out by anyone because of the operational requirements following the fire.
[10] The issue of whether Midwest complied with any obligation to consult in the relevant modern award was the focus of this appeal. The Commissioner addressed this matter in the following terms: 3
“[31] It would be inconceivable for Mr Wessels to think that employee requirements would not change after the fire and production ceasing at the beneficiation plant. On 26 February 2014, Mr Wessels received correspondence in which he was required to return home from site before the end of his usual roster and was paid as if he had worked the roster. On 27 February 2014, correspondence from the Employer confirmed that he was stood down on full pay and that this was not a reflection of his work but because the Employer was trying to manage the consequences of the fire.
[32] On being stood down, Mr Wessels had a discussion with the then Maintenance Manager, who allegedly said if “everything proceeded I would have a position in maintenance”. I have no reason to dispute what Mr Wessels states, however, in the context of the fire, the insurance claim and the entire uncertainty over when the plant would become operational again, it is unlikely that Maintenance Manager was in a position to give such an assurance, even if he had the authority, to give such an assurance.
[33] From the Applicant’s material, he states that, “following the fire, I had to wait a month for my pay. There were several meetings held on site during February 2014 where I was told on several occasions that our pay would come through with the insurance claim”. In my view, uncertainty, conjecture and instability were the likely business environment more so than concrete assurances about who would or who would not have a job.
[34] Mr Wessels claims that “not once during at any meeting was I told that my position may be made redundant”. Given the business environment, that was most probably a fair reflection of the situation he was working within.”
[11] The Commissioner considered the award provisions in the following terms: 4
“[36] The circumstances in which the Employer is required to discuss with affected employees changes are those when it “has made a definite decision to introduce major change in production”.
[37] From the material I have received as a result of submissions, I can say with certainty that the Employer did not make a “definite decision to introduce changes in production” - the changes in production was caused by the fire. This was a ruinous event forced on the Employer rather than the Employer being the architect of the change in production.
[38] Even if I am wrong in relation to the meaning of paragraph 8.1(a)(i) of the Modern Award, I have documents submitted by the Employer that it did consult with employees and by Mr Wessels’ own statement, discussions were held with employees, albeit the discussion did not specifically relate to his position being made redundant.”
[12] The Commissioner rejected Mr Wessels’ submission that it would be reasonable to re-deploy him into work which was allocated to others at the mine. His conclusion that the termination of Mr Wessels’ employment met the requirements for a genuine redundancy resulted in the dismissal of the application.
The Appeal
[13] Mr Wessels’ appeal is made on the grounds that the Commissioner’s decision disclosed significant errors of fact in finding that there had been consultation and that Midwest had not made a decision to introduce changes in production, and an error of law in its finding of a genuine redundancy when there was non-compliance with s.389(1)(b).
[14] Mr Wessels asserts that his appeal raises issues of public interest such that a grant of permission pursuant to s.400 of the FW Act should be made.
[15] The Midwest position is that the appeal does not give rise to public interest considerations and that the Commissioner’s decision was neither attended by errors of fact or of law.
The Public Interest
[16] Section 400 states:
“400 Appeal rights
(1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.”
[17] This provision was addressed in GlaxoSmithKline Australia Pty Ltd v Makin 5 in the following terms:
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question.
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
(references removed)
[18] We have applied that approach.
[19] Whilst it was not raised with us in the appeal proceedings, we note at the outset that the Commissioner’s decision was made following a statement in directions issued on 22 May 2014 which required the provision, by both parties, of statements of fact and written submissions. The decision made findings based on the material provided to the Commissioner without the conduct of a hearing or conference.
[20] Section 397 of the FW Act states:
“397 Matters involving contested facts
The FWC must conduct a conference or hold a hearing in relation to a matter arising under this Part if, and to the extent that, the matter involves facts the existence of which is in dispute.”
[21] In Mr Wessels’ circumstances contested issues of fact appear to relate to whether there was an undertaking given to Mr Wessels of his position in maintenance, 6 or to the nature of any consultation consistent with the modern award requirements.7
[22] To this extent, we consider that the Commissioner’s procedure in addressing the matter may not have conformed with the requirements of the FW Act. In the recent matter of Tino v Regis Resources Ltd 8a Full Bench stated:
“[8] Section 397 of the Act provides that the Commission must conduct a conference or hold a hearing in relation to a matter under the unfair dismissal Part of the Act if, and to the extent that, the matter involves facts the existence of which are in dispute. In so far as the Commissioner relied on untested evidence without holding a conference or hearing, the failure to conduct a conference or hearing as required by s.397 may constitute a reason for reconsidering the conclusion he reached. However, any reconsideration would need to follow the procedure required by the Act. Otherwise the Full Bench would be making the same error made by the Commissioner.
[9] In these circumstances we consider that we should adopt a course that ensures the provisions of the Act are followed and there is a full and proper consideration of the factual and legal matters that were required to be determined. We do not propose to say more about the grounds of appeal in the absence of that full and proper consideration.”
[23] We acknowledge that the consideration of matters, including jurisdictional issues, on the basis of written materials only is a common and effective approach adopted by the FWC and is an approach commonly convenient to parties. We support and endorse that approach. However, section 397 requires consideration where there is a disputed issue of fact. Irrespective of any disputed facts we have proceeded to consider the utility of the appeal in the particular circumstances of this matter on the premise that there are disputed issues of fact. We do not propose to adopt the approach in Tino in these circumstances for the following reasons.
[24] We think that, even if the facts asserted by Mr Wessels had been accepted by the Commission at first instance, it would have made no difference to the finding that the dismissal was not harsh, unjust or unreasonable or, alternatively, to the practical outcome of the matter.
[25] Our conclusion in this respect is based on the confirmation, in the appeal hearing that there was, and is no job for Mr Wessels to return to. Mr Wessels is seeking compensation. He has confirmed that reinstatement is not pursued and there is no argument that there is a position to which he could be otherwise appointed. Mr Wessels has conceded that the termination of his employment was a case of genuine redundancy, but for the operation of s.389(1)(b).
[26] A Full Bench decision in UES (Int’l) Pty Ltd v Leevan Harvey 9(UES) considered a redundancy situation in the context of s.389. In that matter the majority concluded that UES no longer required the job done by Mr Harvey to be done by anyone else because of operational changes in the business and it was not reasonable to redeploy him. However, because the dismissal did not meet the requisite consultation requirements that matter then required consideration pursuant to s.387 of the FW Act. The majority then considered the capacity for consideration of the process for selecting the employee for redundancy. It adopted the position that:
“[28] We think it unlikely that it was intended that FWA’s consideration of whether there was a valid reason for the dismissal related to the person’s capacity or conduct would extend to the process for selecting the person for redundancy when:
(i) the process for selecting a person for redundancy is not relevant to FWA’s determination of an unfair dismissal remedy application if the s.389 criteria for a case of genuine redundancy are met, and
(ii) any unmet criteria in s.389 of the FW Act can be taken into account as part of s.387(h) in FWA’s consideration as to whether the dismissal was harsh, unjust or unreasonable.
[29] To conclude otherwise would mean that where an employer met the s.389 criteria for a genuine redundancy the process for selecting the person for redundancy would not be a matter FWA would consider in respect of an unfair dismissal remedy application. However (unless the application was otherwise determined) an employer who did not meet the s.389 criteria because, for example, they failed to consult as required by s.389(b) of the FW Act would have both the failure to consult and the process for selecting the person for redundancy considered in any unfair dismissal remedy application.
[30] We recognise that statutory provisions concerning a valid reason for termination of employment connected with or related to an employee’s capacity or conduct and the issue of the selection process for redundancy were considered by the Full Federal Court in Kenefick v Australian Submarine Corporation Pty Ltd (No 2) 17 and Cosco Holdings Pty Ltd v Thu Thi Van Do and Others18 and a Full Bench of the Australian Industrial Relations Commission in Windsor Smith v Lui.19 However, the legislative context in which each of those decisions was made was very different to that in the FW Act.”
[27] On this basis the majority then addressed the considerations in s.387, concluding that, while the employment termination was harsh, unjust or unreasonable because of the failure of the employer to consult, its consideration of compensation as a remedy was constrained by the additional time associated with the required consultation process.
[28] We think that irrespective of a finding in Mr Wessels’ favour relative to the appeal, or relative to s 387 such that the termination of his employment was harsh, unjust or unreasonable because of a failure to consult consistent with s.389(1)(b), the compensation that could ultimately be considered in this particular situation pursuant to s.392 of the FW Act would be, at best, minimal. We accept that there are circumstances where a finding that a dismissal was unfair even if no compensation were ordered may be of value to an applicant. For example, where an employee’s employment was terminated because of allegation of poor performance or misconduct. However this is not such a case. Mr Wessels’ employment was not terminated for any fault on his part.
[29] In these circumstances we see no real utility in pursuing the matter and we are not satisfied public interest considerations arise.
[30] Had it not been the case that our acceptance of the facts asserted by Mr Wessels still means that the appeal lacks utility, we would have requested the parties to address s397. However, for the reasons we have set out, we do not consider it necessary, or appropriate, to determine the extent to which the Commissioner’s decision was in error.
[31] Permission to appeal is refused and the appeal is dismissed on this basis.
SENIOR DEPUTY PRESIDENT
Appearances:
P Mullally appearing for the Appellant.
T Bourke counsel for the Respondent.
Hearing details:
2014.
Perth:
August 29.
1 [2014] FWC 4514 / PR552826
2 [2014] FWC 4514, paras 10-22
3 [2014] FWC 4514, paras 31-34
4 [2014] FWC 4514, paras 36-38
5 [2010] FWAFB 5343
6 [2014] FWC 4514, para 32
7 [2014] FWC 4514, para 38
8 [2014] FWCFB 5358
9 [2012] FWAFB 5241
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