Ken McShane v Port of Newcastle

[2019] FWC 177

[2019] FWC 177

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ken McShane
v
Port Of Newcastle
(U2018/8250)

DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 14 JANUARY 2019

Application for an unfair dismissal remedy – jurisdictional objection – genuine redundancy – application dismissed.

[1] Mr Ken McShane was employed by the Port of Newcastle (PON) as a CAD Draftsman/GIS Officer from about August 2008 until 23 July 2018. PON contends Mr McShane’s dismissal was a genuine redundancy within the meaning of s 389 of the Fair Work Act 2009 (Cth) (Act). Mr McShane denies that assertion and contends that his dismissal was harsh, unjust and unreasonable.

Background

[2] Mr McShane filed his unfair dismissal application in the Fair Work Commission (Commission) against PON on 10 August 2018 (Application).

[3] I decided that it was appropriate to hold a determinative conference rather than a hearing in this matter. In making that decision, I had regard to the views of the parties, together with the fact that a determinative conference would be the most effective and efficient way to resolve this matter. The determinative conference was conducted in Newcastle on 7 December 2018. Mr McShane represented himself. Mr Scott, solicitor, was granted permission to appear for PON pursuant to s 596(2)(a) of the Act.

[4] Mr McShane gave evidence at the determinative conference. PON adduced evidence from Mr Jonathan Morris, Executive Manager People, Safety and Environment Services of PON, and Mr Keith Wilks, Executive Manager, Marine and Operations, PON.

Initial matters to be considered

[5] Section 396 of the Act sets out four matters which I am required to decide before I consider the merits of the Application.

[6] There is no dispute between the parties and I am satisfied on the evidence that:

(a) the Application was made within the period required in s 394(2) of the Act;

(b) Mr McShane is a person protected from unfair dismissal; and

(c) PON was not a “small business employer” as defined in s 23 of the Act, so the Small Business Fair Dismissal Code does not apply to Mr McShane’s dismissal.

[7] In relation to the fourth initial matter which I am required to consider, there is a dispute between the parties regarding whether Mr McShane’s dismissal was a genuine redundancy. Accordingly, I must decide that question before I consider the merits of the Application.

Genuine redundancy

[8] Section 389 of the Act defines genuine redundancy 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.”

[9] “Associated entity” has the meaning given by s.50AAA of the Corporations Act 2001 (Cth).

The employer no longer required the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise (s 389(1)(a))

[10] It is necessary to determine whether PON no longer required the job of Mr McShane to be performed by anyone because of changes in the operational requirements of PON’s enterprise. 1

[11] A job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee”. 2 Where there has been a reorganisation or redistribution of duties, the question is whether the employee has “any duties left to discharge”.3 If there is no longer any function or duty to be performed by that person, their job becomes redundant.4 For example, an employer may redistribute all the tasks done by a particular person between several other employees, resulting in the person’s job no longer existing.

[12] An employee’s job may still be genuinely made redundant when there are aspects of the employee’s duties still being performed by other employees. 5 The test is whether the job previously performed by the employee has survived the restructure or downsizing, not whether the duties have survived in some form.6

[13] The reference to “changes in the operational requirements of the employer’s enterprise” in s 389(1)(a) of the Act includes circumstances where an employer restructures its business to improve efficiency, productivity, sales, revenue or some other aspect of performance. The operational circumstances of a business which may give rise to a redundancy will reside in the direct knowledge of the employer. The evidentiary onus is on the employer to provide direct evidence about the nature of the employee’s job and why it is no longer required to be performed as a result of changes in the operational requirements of the employer’s enterprise.

[14] If a dismissal is found to be a genuine redundancy within the meaning of the Act, issues such as unfair selection procedures for redundancy are not relevant, because they go to the merits of the claim that the applicant was dismissed harshly, unjustly or unreasonably. 7

[15] Mr McShane contends that his job continued to exist after his dismissal. In support of this contention, Mr McShane submits that the newly created position of Spatial Information Specialist at PON is identical to his job save that the person employed in the position of Spatial Information Specialist must hold a tertiary qualification in Geographical Information Systems (GIS). Mr McShane argues that a tertiary qualification is not required to undertake his job and gave evidence that when he first applied for his job, PON knew that he did not have a tertiary qualification and employed him anyway.

[16] In support of his contention that his job continued to exist after his dismissal, Mr McShane also points to the fact that PON directed him to attend an independent medical examination for the purposes of determining whether he was fit to perform the inherent requirements of his job in early May 2018. The background to this direction is that Mr McShane had been certified as unfit for work between the period from 31 July 2017 to 23 May 2018.

[17] Mr McShane argues: 8

“In hindsight it seems unusual that PON would go to the trouble and expense of employing a forensic psychiatrist and engaging a solicitor to determine my fitness to return to the specific duties of a position which was about to be abolished.”

[18] Mr McShane also suggests that PON discriminated against him based on his mental health. 9

[19] I do not accept these arguments, for the following reasons.

[20] First, I accept Mr Wilk’s evidence that the changes in PON’s operational requirements were as follows:

(a) the amount of CAD work required to be undertaken in PON’s business had steadily declined since around 2014-15 due to technological advancements and other business changes;

(b) PON made a decision in around November 2017 to implement a more sophisticated GIS, which demanded enhanced capabilities in relation to the administration of the GIS;

(c) as a result of the implementation of the new GIS, PON made a decision to create a new position of Spatial Information Specialist to manage the GIS; and

(d) as a result of the creation of the Spatial Information Specialist position, the position of CAD/GIS Officer was determined in late May 2018 to no longer be required.

[21] Secondly, I accept that PON no longer employs any person in the role of CAD/GIS Officer. That role has been made redundant, as have about 17 other positions that were affected by the restructure introduced by PON in about mid-2018.

[22] Thirdly, I accept the evidence adduced by PON to the effect that it genuinely required a person with tertiary qualifications in GIS to undertake the new role of Spatial Information Specialist. The more sophisticated GIS being introduced by PON and the importance of it to PON’s operations, support PON’s contention that such qualifications were genuinely required for the new role. I also accept the evidence given on behalf of PON that there are material differences between Mr McShane’s role of CAD/GIS Officer and the new role of Spatial Information Specialist. Those differences include: 10

(a) the CAD/GIS Officer position involved, predominantly, computer-aided-drafting (CAD) work. In contrast, the Spatial Information Specialist position does not involve any computer-aided-drafting (CAD) work. The role is predominantly an IT-based position, with the IT component of the role involving managing in-house servers, databases, writing script reports and end-user programs and managing large storage servers. A core function of the role involves the development and administration of web-based spatial information applications and data-sets;

(b) The only real connection/involvement that the CAD/GIS Officer position had with the GIS was that the role involved helping to implement a GIS through transitioning or inputting data into a new GIS and adding and archiving new data. In other words, this work was effectively data entry work, rather than managing and maintaining a GIS by writing script reports, managing the database or servers;

(c) the Spatial Information Specialist position does not involve the preparation of hydrographic survey charts;

(d) the Spatial Information Specialist position does not involve the preparation or update of data for the dredging database;

(e) the essential knowledge, skills and experience of the Spatial Information Specialist position requires demonstrated experience in developing, administering and delivering spatial information applications. This extensive essential requirement far exceeds the CAD/GIS officer position’s essential knowledge, skills and experience of comprehensive experience of drafting, CAD procedures and CAD software with just experience in use of GIS and related software;

(f) the Spatial Information Specialist position requires essential proven knowledge and experience in the use of specific GIS programs and servers as named in the PD. The CAD/GIS Officer position has as an essential requirement of only a general knowledge of computer hardware and software applications and use of GIS related software; and

(g) the Spatial Information Specialist position requires integration of the GIS with other enterprise IT systems. The CAD/GIS Officer position links specific date addresses in the other systems i.e. a “click through” link rather than full software integration.

[23] Fourthly, I accept evidence adduced on behalf of PON to the effect that the redundancy of Mr McShane’s job and the termination of his employment were not in any way connected to his absence from work due to illness or his mental health. The genuine operational need to implement a more sophisticated GIS and the reduced demand for CAD work support this finding, as does the concession by Mr McShane that he does not have the qualifications necessary for the new role of Spatial Information Specialist. Further, that Mr McShane was directed to attend a medical examination in about early May 2018 was, in my view, appropriate in circumstances where he had been absent from the workplace for a significant period of time and no decision had been made, at that time, to make his position redundant.

[24] For the reasons set out above, I am satisfied on the balance of probabilities that the real reason for Mr McShane’s dismissal was the redundancy of his job as CAD Draftsman/ GIS Officer and that PON no longer required Mr McShane’s job to be performed by anyone because of changes in the operational requirements of PON’s enterprise.

Compliance with any consultation obligation in a modern award or enterprise agreement that applied to the employment (s 389(1)(b))

[25] For there to be a genuine redundancy within the meaning of s 389 of the Act, PON must have complied with any obligation in a modern award or enterprise agreement to consult about the redundancy.

[26] There is no dispute between the parties and I am satisfied that Mr McShane was covered by the Port of Newcastle Enterprise Agreement 2016-2019 (Enterprise Agreement) during his employment with PON.

[27] Clauses 20.2 and 26(m) of the Enterprise Agreement impose consultation obligations on PON in the event of major workplace change leading to redundancies. Those clauses relevantly provide:

“20.2 Consultation about major change

a) PON Duty to Notify

i) This Agreement recognises that PON management is obligated to carry out its responsibilities in accordance with PON policies and additionally, where such policies relating to production, program, organisation or technology may also affect the rights and interests of its Employees, PON management is also obligated to consider the rights and interests of its Employees in the implementation of such policies. Accordingly:

ii) Where PON has made a definite decision to introduce changes in production, program, organisation, structure or technology in relation to its enterprise that are likely to have significant effects on Employees, PON will notify the Employees who may be affected by the proposed changes and the appropriate Union Official.

iii) The relevant Employee(s) may appoint a representative for the purpose of the consultation procedure and the Employee(s) must advise PON of the identity of the representative and PON must recognise the representative.

iv) Without limiting the generality thereof, change which is likely to have a significant effects on an Employee includes termination of employment, changes in the composition, operation or size of the workforce or in the skills required of employees, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work or roster, the need for retraining or relocation or transfer of Employees to other work or locations, the restructuring of jobs, the use of contractors and the change of control of PON's business.

b) PON Duty to Discuss Change

i) PON undertakes to discuss with the Employees affected and the Union in good faith, inter alia, the introduction of the changes referred to in clauses 20.2(a)ii) and 20.2(a)(iv), the effects the changes are likely to have on Employees, measures PON is taking to avert or mitigate any adverse effects of such changes on Employees and give prompt consideration to matters raised by the Employees and/or the Union involved in relation to the changes.

ii) The discussion shall commence as early as practicable after PON has determined it will make the changes referred to in clauses 20.2(a)(ii) and 20.2(a)(iv). For the purposes of such discussion, PON undertakes to provide in writing to the Employee(s) concerned and the Union(s), all appropriate relevant information about the changes including the nature of the proposed changes, the expected effects of the changes on Employees and any other matters likely to affect Employees. PON is not required to disclose confidential or commercially sensitive information to the relevant employee(s) and the Union(s) involved.

c) Implementation of Change

It is agreed between the parties that after the above notification and discussion has taken place that PON, after careful genuine consideration of the views of Employees, may implement the change with seven days’ notice unless agreed between the parties…

26. Redundancy

…

m) Consultation will take place on an ongoing basis with Employees and Unions regarding any restructuring and the process to be used. The parties agree that restructuring will be an ongoing requirement in the interest of achieving greater efficiencies and heightened effectiveness.”

[28] Mr McShane submits that PON did not take any steps to include him in the consultation process or to advise him that it was occurring. Mr McShane contends that the offer from Mr Simon Gelder and Mr Morris to meet was “nothing more than a token gesture”. 11

[29] I am satisfied on the evidence that PON complied with its obligations in the Enterprise Agreement to consult with Mr McShane about his redundancy. In particular:

(a) PON made a definite decision in about late May or early June 2018 to introduce major changes in organisation or structure that were likely to have significant effects on employees. That decision was to restructure the business in the manner described above;

(b) PON notified Mr McShane of the decision to introduce the major change. The notification took place via letter dated 6 June 2018; 12

(c) PON notified the relevant official at the Australian Maritime Officers Union (AMOU), Mr Neiberding, of the change by telephone on 4 June 2018;

(d) PON communicated with Mr McShane the introduction of the changes, the effects the changes were likely to have on him, and measures PON was taking to avert or mitigate the adverse effect of the changes on Mr McShane. Those communications took place via letter dated 6 June 2018 and emails during the period between 7 June and 24 July 2018. It is also relevant that Mr McShane was not in the workplace at the time these changes were being communicated to the workforce, but PON made a number of invitations to meet with Mr McShane in a location of his choice to engage in oral discussions with him about the changes and their impact on him. Mr McShane was not willing to meet with PON to engage in such oral discussions. I am satisfied on the evidence that these offers to meet with Mr McShane and engage in oral discussions with him in relation to relevant matters were genuine. I am also satisfied that PON took all reasonable steps available to it to engage in oral discussions with Mr McShane about the changes, but it was not able to engage in such discussions because Mr McShane was unwilling to meet with PON;

(e) PON provided, in writing, to Mr McShane all relevant information about the change including the nature of the change proposed, information about the expected effects of the change on Mr McShane, and any other matters likely to affect Mr McShane. That information was provided in a letter sent to Mr McShane on 6 June 2018 and in PON’s email communications to Mr McShane in the period between 7 June and 24 July 2018;

(f) PON gave prompt and genuine consideration to matters raised about the major change by Mr McShane; and

(g) PON’s consultation with Mr McShane took place on an ongoing basis prior to his dismissal on the grounds of redundancy.

[30] PON accepts, rightly in my view, that the erroneous information and calculations which Mr McShane received (primarily from the payroll company PON engaged) about offers of voluntary redundancy made to him by PON were unsatisfactory and embarrassing. Notwithstanding the deficiencies in those calculations and communications concerning offers of voluntary redundancy, as frustrating as they were for Mr McShane, I remain satisfied, for the reasons given, that PON complied with its obligations in the Enterprise Agreement to consult with Mr McShane about his redundancy.

Was it reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer (s 389(2))

[31] For the purposes of section 389(2) of the Act, the Commission must consider 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 employee. There must be an appropriate evidentiary basis for such a finding. 13 The word “redeployed” in section 389(2) of the Act should be given its ordinary and natural meaning, which is to “transfer to another job, task or function”.14

[32] If an employer wishes to rely on the “genuine redundancy” exclusion in section 389 of the Act, then it would ordinarily be expected to adduce evidence, on the question of redeployment, as to 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 employee. Such evidence would usually include the steps taken by the employer to identify other jobs, positions or work which could be performed by the dismissed employee. 15

[33] Whether it would have been reasonable in all the circumstances for the person to be redeployed, directs attention to the circumstances which pertained when the person was dismissed. 16 However, the circumstances leading up to the time the employee was dismissed may, in particular cases (such as where there has been a redeployment period for an employee prior to their dismissal), be relevant to a determination of whether it would have been reasonable in all the circumstances for the employee to have been redeployed.17

[34] In determining whether redeployment would have been reasonable a number of matters may be relevant, including:

(a) whether there exists a job or position or other work to which the employee can be redeployed; 18

(b) the nature of any available position; 19

(c) qualifications required to perform the job; 20

(d) the employee’s skills, qualifications and experience. The employee should have the skills and competence required to perform the role to the required standard either immediately or within a reasonable period of retraining; 21 and

(e) the location of the job in relation to the employee’s residence and the remuneration which is offered. 22

[35] Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. 23

[36] It is important, however, to appreciate that, because there is a requirement to assess the reasonableness of redeployment “in all the circumstances”, it is not possible to establish binding or decision rules concerning the application of section 389(2) of the Act in all cases; the circumstances of each particular case must be considered. 24

[37] I am satisfied that it would not have been reasonable in all the circumstances for Mr McShane to be redeployed within PON’s enterprise, or an enterprise of an associated entity of PON, for the following reasons:

(a) Mr McShane was offered the opportunity to express an interest in all available positions, including the new role of Spatial Information Specialist, but he elected not to do so;

(b) Mr McShane accepts, and I am satisfied, that he is not qualified for any of the available positions, including the new role of Spatial Information Specialist;

(c) I accept evidence adduced on behalf of PON that none of the available positions were suitable for Mr McShane, in light of his skills, experience and qualifications. I also accept that it would not have been reasonable to require PON to train Mr McShane for any of the available roles, given such training would have been considerable and taken significant time. For example, it would have taken Mr McShane a significant period of time to acquire the tertiary qualifications which are necessary for the role of Spatial Information Specialist;

(d) I accept that, at the relevant time, there were no positions available within PON’s enterprise other than those about which Mr McShane was notified; and

(e) I accept that PON has, and had at the relevant time, “associated entities” but they do not employ anyone.

Conclusion

[38] I am satisfied that PON’s dismissal of Mr McShane was a case of genuine redundancy within the meaning of s 389 of the Act. It follows, by reason of s 385(d) of the Act, that Mr McShane was not unfairly dismissed. I therefore dismiss the Application.

DEPUTY PRESIDENT

Appearances:

K McShane, appearing on behalf of himself

K Scott and M Tiedeman, solicitors appearing on behalf of PON

Hearing details:

2018.

Newcastle:

7 December.

Printed by authority of the Commonwealth Government Printer

<PR703791>

 1 Section 389(1)(a) of the Act

 2   Jones v Department of Energy and Minerals (1995) 60 IR 304 (Jones) at 308 per Ryan J; applied in Ulan Coal Mines Limited v Howarth [2010] FWAFB 3488;(2010) 196 IR 32 (Ulan Coal 1) at [17]

 3   Ibid

 4   Ibid

 5   Dibb v Commissioner of Taxation (2004) 136 FCR 388 at 404-5

 6   Kekeris v A. Hartrodt Australia Pty Ltd[2010] FWA 674 at [27] per Hamberger SDP

 7   Johnston v Blue Circle Southern Cement Pty Ltd (2010) 202 IR 121 at [48]

 8   Ex A1 at [3]

 9   Ex A2 at [16]

 10   Ex R1 at [57]

 11   Ex A1 at [5]

 12   Ex R2; attachment JM-21

 13   Technical and Further Education Commission T/A TAFE NSW v Pykett[2014] FWCFB 714; (2014) 240 IR 130 (TAFE ) at [36]

 14   Ibidat [25]

 15   Ibid at [36]-[37]; Teterin & Ors v Resource Pacific Pty Limited t/a Ravensworth Underground Mine[2014] FWCFB 4125; (2014) 244 IR 252 (Teterin) at [28]-[29]

 16   TAFE at [24] & [35]; Ulan Coal Mines Ltd v Honeysett[2010] FWAFB 7578; (2010) 199 IR 363 (Ulan Coal 2) at [28]

 17   Bhalla v Welltech Total Water Management[2014] FWC 7565 at [55]

 18   Ulan Coal2 at [28]

 19   Ibid at [28]

 20   Ibid at [28]

 21   Ibid at [28] & [34]

 22   Ibid at [28]

 23   Ibid at [34]

 24   Teterin at [35]