Karin Tataroff v Housley Consulting Pty Ltd T/A Housley Consulting Pty Ltd

[2014] FWC 7248

[2014] FWC 7248

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Karin Tataroff
v
Housley Consulting Pty Ltd T/A Housley Consulting Pty Ltd
(U2014/4536)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 17 OCTOBER 2014

Application for relief from unfair dismissal.

Introduction

[1] On 11 February 2014 Ms Karin Tataroff (the Applicant) lodged an application for unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal against Housley Consulting Pty Ltd (the Respondent).

[2] The Applicant commenced with the Respondent on 5 September 2011. She was notified of her dismissal on 23 January 2014 and the dismissal took effect on that day in a practical sense because she did not work out her notice period until 20 February 2014.

[3] A conciliation conference on 7 April 2014 was unsuccessful.

[4] Due of the parties’ commitments, the matter was allocated to the August roster for hearing.

[5] I conducted a programming conference by telephone on 25 July 2014.

[6] The hearing took place in Sydney on 5 August 2014.

[7] The Applicant represented herself. The Respondent was represented by Mr R. Murphy of Somerville Legal. I granted Mr Murphy permission to appear pursuant to s.596 of the Act.

[8] The Applicant relied on her oral evidence and submissions, a written submission and a witness statement. She then lodged supplementary submissions and witness statement following the lodging of the Respondent’s witness statements.

[9] The Respondent relied on oral evidence and submissions, written submissions and the witness statements of:

● Margaret Carter - HR Consultant

● David Street - Shareholder and Director

● Brian Stevens - Shareholder and Director

[10] All lodged supplementary witness statements in response to the Applicant’s statements.

[11] The hearing was conducted by way of a determinative conference.

Background

[12] The Applicant was given notice in a letter on 23 January 2014 that her position was redundant because of a “significant restructure” of the business. The Respondent advised that it had been unable to identify redeployment options. A meeting between the Applicant and Respondent took place on that day.

[13] The Applicant was provided with four weeks pay in lieu of notice and four week’s severance pay even though, as a small business, the Respondent considered it had no legal obligation to pay the latter.

[14] The Applicant’s position was Service Delivery Manager at the Respondent’s North Sydney Office. Her salary was $81,750 per annum in her contract of employment. At the time of her dismissal it was $93,000 per annum including superannuation.

The Respondent’s business is telecommunications broker and consultant. The F2 form attached detailed material setting out the Applicant’s duties which can be broadly described as “office manager duties”.

[15] The Applicant denies that this is a genuine redundancy and argues:

● There was no procedural fairness in the process;

● The business was in fact expanding;

● Her position was unfairly targeted in the organisational restructure given to her in January;

● There were some issues with another employee for which she was unfairly targeted;

● Margaret Carter, as workplace consultant to investigate conflict within the office, did not carry out her task in an even-handed manner.

[16] The Respondent takes jurisdictional objections to the application, submitting that the dismissal was a genuine redundancy and that it is a small business. The F2 form states that it had 12 employees at the time of the dismissal.

[17] The Respondent submits that the dismissal was a genuine redundancy because:

● The Respondent was awarded three large contracts in January 2014. The two principals of the Respondent, Brian Stevens and David Steel decided that a new structure was required so that the management layer was more “specialist” rather than “generalist”;

● The Applicant’s “Service Desk Manager” role did not have any specific technical skills. Its functions were distributed to four new Technical Manager roles. These roles led a couple of specialists in operational teams. They would be responsible for liaising with clients directly, thus freeing up the two principals to be more strategic;

● The Applicant did not have the technical skills to be redeployed into the Technical Manager roles;

● The Applicant was consulted about the redundancy as soon as possible and was provided all consideration following the meeting on 23 January;

● There were difficulties in the workplace relating to team harmony but these were not relevant to the redundancy decision. The report of Margaret Carter, a consulting engaged to report on improving team harmony was attached to the F2.

Protection from Unfair Dismissal

[18] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[19] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

[20] There was no dispute that the Applicant had the required service and although it appears that no award or agreement applied, the Applicant’s income was below the high income threshold.

[21] The Applicant was therefore protected from unfair dismissal.

Was the dismissal unfair?

[22] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“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.

Was the Applicant dismissed?

[23] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the Act. Section 386 of the Act provides that:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[24] There was no dispute that the Applicant was dismissed. She submits that the dismissal was “not a case of genuine redundancy” and therefore was unfair.

[25] Section 396 provides that the Commission must decide whether the dismissal was a case of genuine redundancy before considering the merits of the application.

[26] “Genuine redundancy” is defined in s.389 as follows:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[27] An employer will not be able to rely on the defence of “genuine redundancy” to an unfair dismissal application if it would have been reasonable, in all the circumstances, for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity.

The Applicant’s Case

[28] The Applicant’s basic submission was that the restructure was a device to get rid of her. She provides a lot of detail of the difficulties that she had with some other staff members. She asserts that Margaret Carter did not have a real understanding of the work situation and that her report and subsequent evidence should not be relied on.

[29] The Applicant’s evidence was that she had been assured during 2013 that there would be no redundancies because the business was expanding. The new structure contained four additional positions which are justified by the Respondent because of the new contracts.

[30] The Respondent’s principals, in her submission, took the side of other employees in the office conflicts.

[31] The Applicant appears to concede her lack of technical qualifications but points to her more than 13 years experience in the telecommunications industry and emphasizes her willingness to undergo training to take up one of the new positions. She generally argues that the Respondent did not properly value her contribution.

[32] At the 23 January meeting, the Applicant felt that she had not been treated equally or with respect.

The Respondent’s Case

[33] The Respondent submits that the restructure was genuine. It argues that there has been no evidence produced which establishes that this was not the case.

[34] The Respondent submits that Ms Carter was engaged on a bona fide basis and her evidence should be accepted.

[35] The two principals came to the view in January 2014 that the increased workload arising from the successful tender of three major projects was best dealt with by a restructured operation. Separate specialist teams were established with their own managers. The previous duties of the Applicant are now shared between these managers

[36] The Respondent consulted with the Applicant as soon as possible after they had finalised the proposal. A transcript of the 23 January meeting was attached to Brian Stevens’ statement (Exhibit M1) at Annexure D.

[37] There were a number of staff conflict issues but these had nothing to do with the restructure. The Respondent submits that it investigated these issues and took appropriate action where they had been substantiated.

[38] Margaret Carter’s witness statements (Exhibit M6 and M5) outline in detail her role. Her report is attached to Exhibit M6. It made a range of recommendations as to how communication could be improved. Her evidence was that discussions relating to restructure in January 2014 had nothing to do with any of the work done in November/December to improve the relations in the workplace. Her evidence supports the accounts given by David Street and Brian Stevens.

[39] The creation of separate teams within a specific technology area meant that their managers would be directly responsible for their own workload and liaise directly with clients. They would report directly to the principals. The role of the Applicant in managing other employees and their workloads was therefore no longer needed. One aim was to reduce the principals’ day-to-day involvement in the business.

[40] It is further submitted that given the Applicant’s lack of technical skills it would not have been reasonable for her to be re-deployed within the business. The nature of each of the roles is detailed in Brian Stevens’ statement (Exhibit M1).

Was the Dismissal a Genuine Redundancy within s.398(1)?

[41] The Respondent must show that it no longer required the Applicant’s job to be performed by anyone because of changes in the operational requirements of its enterprise and that it complied with the consultation obligations in a modern award or enterprise agreement, if they apply. It was not contested that the Applicant, being in a managerial role, was award free and was not covered by any enterprise agreements. Therefore, the consultation requirement does not arise.

[42] The test is whether the previous job had survived a restructure or downsizing, rather than a question as to whether the duties have survived in some form: Kekeris v A. Hartrodt Australia Pty Ltd ([2010] FWA 674). A “job” being “a collection of functions, duties and responsibilities, as part of the scheme of the employees’ organisation, to a particular employee” Jones v Department of Energy and Minerals ([1995] QIR 304). The onus is on the employer to prove, on the balance of probabilities that the redundancy was due to changes in operational requirements: Kieselbach v Amity Group Pty Ltd (DP Hamilton, 9 October 2006 PR973864).

[43] It is submitted by the Respondent that the result of the restructure was that the Applicant no longer had any function or duty to perform and therefore her position was redundant. The fact that aspects of her duties were transferred to the other employees does not mean that she was not genuinely made redundant.

[44] I accept the Respondent’s submission that this is essentially a case where a business has been restructured to improve efficiency and meet new challenges and the tasks performed by the Applicant have been distributed to other employees.

[45] I was referred to the decision of Cribb C in Broadbent v Irrigear Stores Ltd[2013] FWC 5902 (26 August 2013). The Commissioner held:

“[23] Therefore, I remain of the view that Irrigear Stores no longer required Ms Broadbent’s job to be performed by anyone because of a change in the operational requirements of the organisation. The change was the need for a specialist marketing and communications person for the future of the business. I have not been convinced that the change was a ruse and an easy way out for Mr Treptow in terms of dealing with the issues between Ms Broadbent and Ms O’Grady.

[24] The Explanatory Memorandum, in relation to section 389(1)(a) of the Act, describes one of the possible changes in the operational requirements of an enterprise as the distribution of the tasks done by a particular employee to other employees and therefore the person’s job no longer exists. As indicated during the hearing, in reaching this conclusion, I also rely on the Full Bench decision in Ulan Coal.”

The facts in this matter support the same conclusion.

[46] I accept the evidence of David Street, Brian Stevens and Margaret Carter that the restructure was implemented for bona fide operational reasons and not as a device to remove the Applicant unfairly.

[47] I find that there were obviously workplace conflicts but there is no evidence that these, and in particular the Applicant’s role in them, were the reason for the redundancy.

[48] I find that, as an example, the explanation provided by Brian Stevens below is descriptive of a genuine redundancy:

“Mr Stevens, are you aware that in July 2013, that I was complimented in my performance appraisal, for the monthly reports looking better?---That may be the case, but as I said earlier, that’s no longer a task that’s done by the organisation. The creation of a Word report, in a Word document, is no longer undertaken. It has been automated by the system. That is why the position that you occupied was made redundant, because we no longer require anybody to do that function. It wasn’t a function that you were doing a bad job. As you’ve said previously, we had no issues with the job you were doing. The job you were doing was non-technical, and it was micromanaging people to do tasks. We no longer require someone to micromanage to do tasks. We require technical people to undertake technical tasks, and to do those technical tasks to the level that is required by the organisation; and be able to talk to our clients, who themselves are high-level technical people, at that level, so that we are adding value to them, rather than not.” (Transcript PN208)

[49] I find therefore, that the Applicant’s job with the Respondent was redundant. Accordingly, I find the requirements of s.389(1) are satisfied.

Redeployment

[50] The approach of the Commission with respect to redeployment is contained in recent Full Bench decisions such as:

● Ulan Coal Mines Limited v Honeysett and others[2010] FWAFB 7578

● Technical and Further Education Commission t/a TAFE NSW v L. Pykett[2014] FWCFB 714

● Teterin v Resource Pacific Pty Limited T/A Ravensworth Underground Mine [2014] FWFB 4125

● Ventyx Pty Ltd v Mr Paul Murray[2014] FWCFB 2143

[51] I have dealt with the issues in recent decisions:

● Teterin v Resource Pacific Pty Limited T/A Ravensworth Underground Mine [2014] FWC 1578

● Vukoja v Toyota Motor Corporation Australia Limited[2014] FWC 3764

● King v Catholic Education Office Diocese of Parramatta T/A Catholic Education Diocese of Parramatta[2014] FWC 6413

[52] The Applicant must establish that it was reasonable for her to be redeployed within s.389(2) for her dismissal to be decided to be not a genuine redundancy. If this is so, the “defence” of “genuine redundancy” available to the Respondent under s.385 will not apply. A decision will then need to be made as to whether the dismissal was otherwise harsh, unjust or unreasonable. An examination of both the actions of the employer and the employee is required. As to what is considered reasonable will turn on the circumstances of each case

[53] I find that the evidence supports a conclusion that the Respondent did properly consider redeployment options. Under the revised structure for the business, there was not an appropriate job, position or other work for the Applicant based on her skills and experience.

[54] I find therefore that there was not a job, position or other work within the Respondent’s enterprise, at the date of dismissal, to which it would have been reasonable in all the circumstances to redeploy her.

Conclusion

[55] I find that the dismissal of the Applicant by the Respondent was a genuine redundancy pursuant to s.389(1).

[56] It follows that the Applicant’s claim for a remedy for unfair dismissal must fail and is therefore dismissed. An order in these terms will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

K. Tataroff self represented, Applicant.

R. Murphy, solicitor for the Respondent.

Hearing details:

2014

Sydney:

August 5.

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