Karen Baker v Roy Morgan Research Ltd

[2013] FWC 6694

[2013] FWC 6694 Note: An appeal pursuant to s.604 (C2013/5276) was lodged against this decision - refer to Full Bench decision dated 20 November 2013 for result of appeal.

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Karen Baker
v
Roy Morgan Research Ltd
(U2013/539)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 6 SEPTEMBER 2013

Application for remedy from unfair dismissal - dismissal was harsh and unreasonable - compensation awarded.

[1] Ms Karen Baker was employed by Roy Morgan Research Ltd (Roy Morgan). Roy Morgan told Ms Baker that her job was redundant and as she was not able to be redeployed terminated her employment on 6 February 2013. Ms Baker said her dismissal was unfair as her position was not redundant.

[2] The issues in dispute in this matter are as follows:

a) Was Ms Baker’s job no longer required because of changes in Roy Morgan’s operational requirements?

b) If it was, did Roy Morgan comply with its obligations under the Roy Morgan Research Enterprise Agreement 2009 - 2013 (the Agreement) to consult with Ms Baker?

c) Was it reasonable to redeploy Ms Baker?

d) If the answer to any one of the questions above was no, was the termination of Ms Baker’s employment harsh, unjust or unreasonable?

e) What is the appropriate remedy?

Was Ms Baker’s job no longer required because of changes in Roy Morgan’s operational requirements?

[3] Mr Sam Schwartz, the Director - HR and Transformation, commenced employment with Roy Morgan on 3 January 2013. He immediately identified two gaps within the HR team, namely recruitment and learning and development. He decided he needed a more senior and strategic role, a Learning and Development Lead. He decided that there was no need for a full-time Asteroid Trainer. 1 On 7 January 2013, he advised Ms Michele Levine, Chief Executive Officer (CEO), that this new role would replace the role currently occupied by Ms Baker.2

[4] Ms Baker had initially been employed as the Asteroid Trainer and Mr Schwartz advised her on 8 January 2013 that the ongoing role of Asteroid Trainer was no longer required and would be made redundant.

[5] At the time Mr Schwartz made that decision Ms Baker had not been doing the job of Asteroid Trainer since August 2012. Mr Schwartz knew that Ms Baker “was the designated trainer for Asteroid and that she was currently also fulfilling duties in the HR team in an administrative capacity but that she hadn’t undertaken any Asteroid training for some months.” 3

[6] It was not clear what Ms Baker’s actual position was at the time of this decision. Ms Levine gave evidence that she had agreed that Ms Baker be transferred to a broader training role within the HR team. 4

[7] Ms Baker understood that she had been seconded to the HR team to supervise the more junior staff when an earlier HR Director had resigned. She said that, when Ms Athina Katiforis took over the supervision of the HR team in November 2012, she asked to return to her substantive position as Asteroid Trainer. Ms Katiforis then told Ms Baker that her position no longer existed, 5 and as her role had been absorbed by others, it was no longer available. Ms Katiforis told her that her position was Roy Morgan trainer and that her position would be reviewed by the incoming HR Director and that she could not guarantee that Ms Baker would have a position once the review had taken place.6

[8] While Ms Katiforis did not recall telling Ms Baker that her role was a HR trainer, she did tell Ms Baker that her immediate role was to support the HR team in an administrative capacity. She agreed that she told Ms Baker that the new HR Director would review the HR team structure and that there may not be a position for her after the review. 7

[9] I accept Ms Baker’s evidence on this point as her evidence is consistent with Ms Levine’s understanding and was not contradicted by Ms Katiforis’s evidence. It is also consistent with Mr Schwartz’s evidence that Ms Baker had not performed the role of Asteroid Trainer in the six months prior to the termination of her employment. 8

[10] It was submitted by Ms Baker that while the position of Asteroid Trainer was made redundant, that was not Ms Baker’s position. Roy Morgan, in its final oral submissions responded to the inconsistency in its evidence about this, by contending that Mr Schwartz’s letter advising Ms Baker that her position as Asteroid Trainer was redundant meant “your role as unspecified trainer within the HR department will become redundant.” 9

[11] I do not accept these submissions. Mr Schwartz’s evidence on this point was clear. It was the position of Asteroid Trainer that he identified as no longer being required.

[12] To be satisfied that this is the case of genuine redundancy, I must first be satisfied that Roy Morgan no longer wanted Ms Baker’s job performed by anyone because of changes in operational requirements. It is clear that by 7 January 2013, Mr Schwartz had decided to replace Ms Baker’s current role 10 and it does not appear to have been material to his decision what that role was. As he explained it, “[he] only assessed whether, given a head count, a dedicated person to training Asteroid was an appropriate use of resource or if we had a better, more efficient use of resource, which [he] determined as being the learning and development role.”11 It was Ms Baker’s role that was to be replaced, whatever her role was. While Mr Schwartz clearly referred to Ms Baker’s role as the Asteroid Trainer in effect he was indifferent to what role she in fact occupied. His email to Ms Levine makes it clear that Ms Baker’s position was to be replaced. While in cross examination Mr Schwartz accepted that he was not aware that Ms Baker had been moved into a broader HR training role it was his evidence that “[he] wouldn’t have acted any differently.”12

[13] It is clear that Mr Schwartz had decided that he required a more senior role and to make way for that vacancy he needed to make Ms Baker’s role redundant.

[14] Mr Schwartz was not provided with information about the HR team prior to commencing work. 13 Mr Schwartz said that he spent a considerable time with Ms Katiforis, as she was handing over to him. This evidence was not supported by Ms Katiforis who said that she had a short handover meeting with Mr Schwartz and she could not recall discussing any of the HR staff with him and she then went on leave.14

[15] Ms Levine met with Ms Schwartz, in his first week of work, but she did not recall discussing the restructure of the HR team with him. 15 Mr Schwartz’s diary note for 4 January 2013 indicated that the Learning and Development role was discussed at a meeting with Ms Levine.16 It was his evidence that Ms Levine approved the creation of the role on that day and approved the redundancy either at that meeting or on the following Monday.17 Apart from the email sent to Ms Levine on 7 January 2013 no written proposal to restructure the HR department was put to Ms Levine. Mr Tony Bazerghi, who was the Group Head of Asteroid, said that his only discussion with Mr Schwartz was that Asteroid training would be taken under the role of Learning and Development.18

[16] Mr Schwartz made his decision in the first week of his employment. He started work on the Thursday and by Friday he had decided to create a learning and development role and by the next Monday he had decided to make Ms Baker’s position redundant and had drafted the job description for her replacement. 19

[17] There is no evidence that Mr Schwartz considered whether it was possible to create this new position in addition to his existing head count. Neither he nor Ms Levine gave any evidence about this and nor were they cross-examined on this point.

[18] Mr Schwartz determined that having one person working full-time as an Asteroid Trainer was a poor use of a resource. Given that no-one was working full time as an Asteroid Trainer this conclusion may be said to be self evident, but nowhere in his evidence does Mr Schwartz say that there was no need for a generalist trainer in the HR department.

[19] Mr Schwartz made assertions that there were competency gaps within the HR team. However there was no explanation of how he came to this conclusion within one day of commencing work. Mr Schwartz said that the learning and development role was shaped only for the purpose of filing an obvious need in the organisation, one of the two key needs expressed to him in all his meetings with the Executive team. 20 No member of the Executive Team gave evidence that they had expressed a need for such a position in any meeting with Mr Schwartz prior to him recommending that such a position be created. Ms Levine, Ms Katiforis and Mr Bazerghi did not give evidence that they had put this to Mr Schwartz.

[20] Mr Schwartz did not provide any evidence that he undertook any analysis of the business’ training needs. Nor did he give evidence that he undertook an assessment of the competencies of his existing staff.

[21] There is no doubt that Roy Morgan is entitled to decide that it wants different roles performed by its HR staff and, if they did not have the competency to do the work, to restructure its HR team but Roy Morgan must produce evidence to the Fair Work Commission (the Commission) of its operational reasons for doing so.

[22] A desire to do things differently is not enough. To establish that there were changes in the operational requirements of the business, there needs to be more than assertions. Mr Schwartz gave no evidence about what were the changes in the operational requirements of the business that required the creation of the Learning and Development position and the abolition of the job being performed by Ms Baker.

[23] The onus is on Roy Morgan to establish on the balance of probabilities that there were operational reasons. The evidence presented falls well short of what is required to meet that standard of proof. Ray Morgan has failed to meet that onus.

[24] I am unable to find that Ms Baker’s position was made redundant because of changes in Roy Morgan’s operational requirements.

Did Roy Morgan comply with its obligations under the Agreement to consult with Ms Baker?

[25] The Agreement contains the model consultation clause and Roy Morgan accepts it had an obligation to consult.

[26] On 8 January 2013, Mr Schwartz told Ms Baker that the position of Asteroid Trainer was being made redundant and that a new position of Learning and Development Lead would be created. He told her she could apply for that position and that she would be offered participation in the redeployment programme but if no suitable position was found her employment would be terminated. 21 There was no suggestion in Mr Schwartz’s evidence that this conversation involved consultation about the decision.

[27] As the then Commissioner Smith said, “consultation is not perfunctory advice on what is about to happen. This is common misconception. Consultation is providing the individual, or other relevant persons, with the bona fides opportunity to influence the decision maker.”  22

[28] In this case there is nothing in the evidence that suggested that Mr Schwartz consulted with Ms Baker after he had made the decision to make her position redundant. While I accept that Mr Schwartz told Ms Baker when he had made the decision, there is no evidence that he “discussed” this change with her. What was being discussed was the implementation of the decision and the consequences for Ms Baker. There was no real opportunity for Ms Baker to change his mind.

[29] I therefore conclude that Roy Morgan did not comply with its obligation to consult with Ms Baker.

Was it reasonable to redeploy Ms Baker?

[30] Mr Schwartz told Ms Baker that she could apply for the new position but she chose not to. As part of the redeployment program, Mr Schwartz sent an email to all executives outlining Ms Baker’s work preferences. He gave evidence that he looked through all known vacancies to see if there was a suitable alternative position but there were no current vacancies that were suitable. He said that he based that decision solely on the qualifications, skills and experience required, or merit. 23

[31] No evidence was given about the nature of these vacancies nor were any of them discussed with Ms Baker.

[32] Mr Schwartz did not attempt to determine if there were vacancies in an associated entity of Roy Morgan. He gave evidence that he spoke to an accountant with the other entities, he did not give evidence that he asked if there were any suitable vacancies.

[33] Ms Baker did not apply for the position of Learning and Development Lead as she said she did not have the necessary prerequisites. Despite this Ms Baker submitted that she could have been redeployed to the position. Mr Schwartz gave evidence that Ms Baker was not qualified for this position. 24

[34] It was submitted that no regard should be had to this evidence as it was not put to Ms Baker and she was not on notice that this evidence was to be given as Mr Schwartz’s second witness statement was not served on her until after she had given evidence.

[35] Ms Baker submitted that she could have filled the position of Asteroid User Support Officer. There is no evidence that this position was available at the relevant time. While it was submitted that it should have been clear that such a position was necessary after the position of Asteroid Trainer was made redundant, this is not supported by the evidence. Ms Baker had not performed the duties of full-time Asteroid Trainer for a considerable period of time and the position was not created until May 2013.

[36] Ms Baker also submitted that she could have been appointed as Asteroid Customer Service Manger (Melb). Similarly, she submitted she could have been redeployed to the position of Software Product Manager. These positions were advertised in May 2013. It was not suggested that these positions were vacant at the time Ms Baker was being considered for redeployment. 25

[37] Ms Baker submitted that she could have been redeployed to a project manager position being filled by Mr Troy Kohut. Ms Baker accepted that this position would mean a reduction in pay but she was prepared to accept that. Mr Kohut gave evidence that he did not offer Ms Baker the position because she was not a suitable candidate. 26

[38] Given my findings that, Mr Schwartz’s decision to make Ms Baker’s position redundant was not because of operational requirements and that consultation as required by the Agreement did not occur, it is not necessary to determine if redeployment would have been reasonable.

Was the termination of Ms Baker’s employment harsh, unjust or unreasonable?

[39] As Ms Baker’s dismissal was not a case of genuine redundancy, it is necessary to determine if the termination of her employment was harsh, unjust or unreasonable.

[40] In considering whether I am satisfied that a dismissal was harsh, unjust or unreasonable, I must take into account the following:

Whether there was a valid reason for the dismissal related to Ms Baker’s capacity or conduct (including its effect on the safety and welfare of other employees): s.387(a)

[41] Roy Morgan did not make any submissions or provide any evidence that Ms Baker’s employment was terminated because of her capacity or conduct.

Whether Ms Baker was notified of that reason: s.387(b)

[42] As the reason must relate to Ms Baker’s capacity or conduct this criteria is not relevant.

Whether Ms Baker was given an opportunity to respond to any reason related to the capacity or conduct of the person: s.387(c)

[43] As the reason must relate to Ms Baker’s capacity or conduct this criteria is not relevant.

Any unreasonable refusal by the employer to allow Ms Baker to have a support person present to assist at any discussions relating to dismissal: s.387(d)

[44] Ms Baker did not ask to have a support person present.

If the dismissal related to unsatisfactory performance—whether Ms Baker had been warned about that unsatisfactory performance before the dismissal: s.387(e)

[45] The dismissal did not relate to unsatisfactory performance.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal: s.387(f)

[46] No submissions were made on this criteria but it should be noted that Roy Morgan is a large employer.

The degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal: s.387(g)

[47] Mr Schwartz gave evidence that he was an experienced HR professional. No submissions were made on this criterion.

Any other matters that the Commission considers relevant: s.387(h)

[48] Ms Baker had been employed for three years.

[49] While Ms Baker contended that her employment was terminated because of her disputes with Ms Levine, it is not necessary for me to make any findings on those disputed events. Mr Schwartz made the decision to recommend to Ms Levine that Ms Baker’s position be made redundant.

[50] Whatever reasons Mr Schwartz had for terminating Ms Baker’s employment there is no evidence to support a finding that the reasons were sound, defensible or well founded.

Conclusion

[51] This was not a genuine redundancy and as Roy Morgan has not put forward any other rational for the termination of Ms Baker’s employment. I find that the termination of Ms Baker’s employment was harsh, unjust and unreasonable.

Remedy

[52] The Applicant does not seek reinstatement. She seeks compensation. She contends that she would have been employed for a further two to three years. Apart from accepting that reinstatement was not appropriate, Roy Morgan accepted that if I found that the termination was harsh, unjust or unreasonable then Ms Baker’s contention was a tenable conclusion because Roy Morgan does not terminate people’s employment.

[53] In assessing any amount in lieu of reinstatement, the Commission is required to have regard to the following:

The effect of the order on the viability of the employer’s enterprise: s.392(a)

[54] No submissions were made by Roy Morgan that the proposed order would have an effect on the viability of the business.

The length of Ms Baker’s’s service with the employer: s.392(b)

[55] Ms Baker had been employed for three years.

The remuneration that Ms Baker would have received, or would have been likely to receive, if she had not been dismissed: s.392(c)

[56] Had Ms Baker remained in employment for a further two years, she would have earned $148,000.

The efforts of Ms Baker (if any) to mitigate the loss suffered because of the dismissal: s.392(d)

[57] Ms Baker sought other work but has only obtained some part time relief work. She was not cross examined on her attempts to mitigate her loss.

The amount of any remuneration earned by Ms Baker from employment or other work during the period between the dismissal and the making of the order for compensation: s.392(e)

[58] At the time of the hearing Ms Baker had earned $4,225.35. In addition she was paid $7,833.45 as a redundancy payment.

The amount of any income reasonably likely to be so earned by Ms Baker during the period between the making of the order for compensation and the actual compensation: s.392(f)

[59] No submissions were made on this criterion.

Any other matter that the Commission considers relevant: s.392(g)

[60] I have had regard to the fact that there may have been a restructure of the HR department that may have led to Ms Baker being made genuinely redundant. Further I have had regard to the fact that Ms Baker may have been terminated for other reasons which were not unfair. I have set this amount at 25%.

Conclusion

[61] Based on these calculations the total compensation would be $101,955.90. This amount exceeds the legislative cap. The legislative cap in Ms Baker’s case is $37,000. I therefore order that Roy Morgan pay Ms Baker $37,000 less applicable taxation within 21 days of this decision.

DEPUTY PRESIDENT

Appearances:

N Campbell of Counsel for the Applicant.

J. Yeatman for the Respondent.

Hearing details:

2013.

Melbourne:

June 3, 4 and 24.

 1   Exhibit R3 at [12]

 2   Exhibit A11

 3   Transcript PN 1611

 4   Exhibit R2 at [10]-[12]

 5   Exhibit A1 at [29]-[30]

 6   Ibid at [31]

 7   Exhibit R5 at [11]

 8   Exhibit R4 at [3]

 9   Transcript PN 2107 - 2109

 10   Exhibit A11

 11   Transcript PN 1613

 12   Ibid PN 1625

 13   Transcript PN 1572

 14   Transcript PN 1788-1794

 15   Ibid at PN 1122-1123

 16   Exhibit A14

 17   Transcript PN 1581-1587

 18   Ibid PN 1894

 19   Exhibit A11

 20   Exhibit R4 at [12]

 21   Exhibit A1 at [42]-[44]

 22   CEPU v Vodafone Network Pty Ltd PR911257 at [25]

 23   Ibid at [19]-[20]

 24   Exhibit R4 at [10]

 25   Exhibit A2 at [75]

 26   Exhibit R8 at [5]

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