Lauren Vidler v Satterley Administration Pty Ltd atf the Satterley Administration Trust

[2020] FWC 3309

[2020] FWC 3309

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Lauren Vidler
v
Satterley Administration Pty Ltd atf the Satterley Administration Trust
(U2020/3381)

DEPUTY PRESIDENT BEAUMONT PERTH, 30 JULY 2020

Application for an unfair dismissal remedy – Jurisdictional objection: dismissal by way of genuine redundancy – Applicant genuinely redundant – Application dismissed.

[1] This decision concerns an application made by Ms Lauren Vidler for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Cth) (Act). Ms Vidler worked for Satterley Administration Pty Ltd atf the Satterley Administration Trust (Satterley) as a Business Development Manager, initially on a full-time basis, from 2 February 2016, and, on returning, from parental leave, on a part-time basis. She was dismissed by way of redundancy on 13 March 2020 and contends her dismissal was harsh, unjust or unreasonable. As a consequence, Ms Vidler seeks compensation.

[2] Satterley has objected to the application on the jurisdictional ground that Ms Vidler’s dismissal was a genuine redundancy for the purposes of s 389 of the Act. In the alternative, if the jurisdictional objection is dismissed, Satterley contends that Ms Vidler’s dismissal was not unfair within the meaning of s 385 of the Act.

[3] I note that the jurisdictional question of whether Ms Vidler’s dismissal was a case of genuine redundancy is one of the four matters that s 396 of the Act requires the Commission to decide before considering the merits of an unfair dismissal application.

[4] Regarding the other three preliminary matters in s 396, none of which were in dispute, I note the following:

a) Ms Vidler’s application was made within the 21 day period required by s 394(2);

b) she was a person protected from unfair dismissal because, while an enterprise agreement did not apply to her in her employment and she was not covered by an award, it was the case that she earned less than the high income threshold (s 382); and

c) there was no question of compliance with the Small Business Fair Dismissal Code as Satterley was not a small business employer at the relevant time.

[5] Insofar as Satterley’s jurisdictional objection is concerned, I have concluded that Ms Vidler’s dismissal was a case of genuine redundancy. My reasons follow.

The background to the matter

[6] Ms Vidler commenced as a full-time Business Development Manager with Satterley on 2 February 2016. Her package included her salary, a fuel card and $80.00 per month toward mobile phone expenses. Ms Vidler stated that for all intents and purposes she represented Satterley Property Group Pty Ltd (SPG) in the performance of her duties, notwithstanding her employment with Satterley.

[7] SPG is a residential land developer, and according to Mr Nigel Satterley, the Chief Executive and Managing Director of Satterley, Ms Vidler worked in the Projects Team. 1 That team was led by a Mr Brenton Downing, the General Manager of Developments (WA).2 Ms Vidler was assigned to the Catalina Estate Project (in the Northern suburbs of Mindarie and Clarkson) (the Project) being run by the Tamala Park Regional Council (TPRC).3

[8] According to Mr Satterley, SPG had an onerous contract with the TPRC, which included provisions as to the oversight of, and last say on, staffing levels and staff members working on its Project. 4

[9] Having taken parental leave in 2019, Ms Vidler returned to work in a part-time capacity in July of that year. Mr Satterley noted that permission was sought from the TPRC for Ms Vidler to return to work in a part-time capacity. Permission was given. 5

[10] It was Mr Satterley’s evidence that, for some time, the Project had been underperforming. 6 As a consequence, Mr Satterley stated that he had been in communication with his senior executives as to how best to deal with the deteriorating situation.7 Mr Satterley referred to a ‘general economic downturn’ having also put pressure on the SPG, and while the Western Australian government did not call a state of emergency until 15 March 2020, Mr Satterley expressed there had been an impact on business from the coronavirus. Because of these matters, Mr Satterley said he met with senior executives to look at how to introduce efficiencies into the business.

[11] Mr Satterley consulted with Mr Downing about the structure of the Projects Team. Mr Satterley held the view that the Projects Team required a reduction of four staff and suggested that Mr Downing look at removing the most junior positions of Business Development Manager. 8 Ms Salvigny, the Human Resources and Office Manager for SPG, gave evidence that in early March, Mr Satterley had provided the names of four Business Development Managers to the Payroll Department and requested that redundancy calculations be prepared for them.9

[12] In Mr Satterley’s view, there were ongoing issues with the commercial viability of the Project. Mr Satterley stated that SPG’s exposure on the Project continued to be high, and SPG needed to continue to meet its contractual obligations to the TPRC. However, in his view there was no logical reason to maintain two project persons working on it. 10 Those two persons were Ms Vidler, and Mr Carl Buckley, who held the more senior role of Project Director.11

[13] Around the time the discussions were taking place about the proposed reduction in staff numbers, Ms Nancarrow, a Project Director, resigned from her position, as did Mr Downing. 12 Ms Salvigny similarly gave unchallenged evidence confirming that a Project Director resigned on 12 March 2020 and the General Manager of Development, Mr Downing, resigned on 11 March 2020.13

[14] Mr Satterley stated that he thereafter restructured the overarching Projects Team, which included elevating a Mr John Silla to the position of General Manager Development & Sales (WA), and he reallocated projects to the remaining Project Team members. Following discussions with Mr Silla and Mr Downing, Mr Satterley stated they decided to make the following two positions at the level of Business Development Manager redundant:

a) Business Development Manager of the Project; and

b) Business Development Manager at the Upper Swan East and Gallery Estate Projects. 14

[15] The duties performed by these two positions were reassigned to existing staff, with both employees being dismissed by way of redundancy. 15 Mr Satterley gave evidence that, given the financial circumstances of Satterley and that the company had commenced internal discussions about the need to suspend staff across the board because of the impending consequence of coronavirus, there were no alternative positions in which to move the two employees.16

[16] Ms Vidler gave evidence that at the same time she was provided with the notice of her redundancy, she understood another Business Development Manager had also received notice of the same, while two other Business Development Managers were retained as part of the restructure. 17

[17] A redundancy letter of 13 March 2020 was prepared for Ms Vidler, which Mr Satterley said he signed. 18 In short, the letter of 13 March 2020 stated, amongst other matters, that SPG had been faced with a downturn in the property market for a significant period, resulting in a considerable decrease in its sales and production volumes.19 The letter continued that a review had been undertaken of the structure of the Projects Team and it had been determined that Ms Vidler’s position of Business Development Manager was no longer required.20 It confirmed that Ms Vidler’s employment with Satterley had been terminated with a final date of 13 March 2020.

[18] Ms Salvigny confirmed that Mr Buckley called Ms Vidler to arrange a meeting to inform her that her position had been made redundant. 21 Ms Vidler gave evidence that she informed Mr Buckley that she had no alternative care for her young child, to which he responded that Ms Vidler was able to bring her child to the meeting if there were no alternative arrangements.22

[19] Ms Salvigny said that a meeting was held on the afternoon of 13 March 2020. Ms Vidler was present in the meeting with her young daughter. 23 She informed Ms Vidler that her position had been made redundant, effective immediately. Ms Salvigny noted she had provided Ms Vidler with the redundancy letter of the same date.24 According to Ms Salvigny, Ms Vidler questioned her on who had made the decision, why her position had been chosen, and expressed that the termination of her employment would place Satterley in breach of its obligations with the TPRC.

[20] Ms Vidler confirmed that at the meeting she queried why her position had been made redundant, and why the Business Development Manager positions of two other colleagues had been retained. 25 Ms Vidler’s evidence was that Ms Salvigny had informed her that two personnel from the Projects Team were not required to service the Project.26 Ms Vidler stated that she was not advised why she had been selected for redundancy, while the positions of two other Business Development Managers were retained.

[21] Ms Salvigny confirmed that the position of Business Development Manager on the Project had not been filled. 27

Protection from Unfair Dismissal

[22] Section 394(1) of the Act provides that a person who has been dismissed may apply to the Commission for an order under Division 4 of Part 3-2 of the Act granting a remedy for unfair dismissal.

[23] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that the circumstances set out at s 385 of the Act existed. Section 385 reads:

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.

[24] Section 396 of the Act provides that before considering the merits of an application for an unfair dismissal remedy order, the Commission must determine some other initial matters. Section 396 is as follows:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[25] The effect of s 396 of the Act is that if a dismissal was a case of genuine redundancy, the Commission does not need to consider whether it is satisfied the dismissal was harsh, unjust or unreasonable.

Genuine redundancy

[26] The term ‘genuine redundancy’ is defined in s 389 of the 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.

[27] The abovementioned factors concerning ‘genuine redundancy’ are traversed, starting with whether Ms Vidler’s job was no longer required to be performed.

Consideration

[28] Ms Vidler appeared to press two main arguments. The first, her redundancy was not genuine because her position was still required under the terms of the arrangement between SPG and the TPRC. The second, her selection for dismissal in circumstances where other Business Development Managers were retained rendered the redundancy not genuine.

[29] That is not to say that Ms Vidler conceded there was a valid reason for her dismissal based on the operational requirements of Satterley or that Satterley no longer required her job to be performed by anyone, arguments, which I will explore further shortly.

No longer requires the person’s job to be performed

[30] To constitute a genuine redundancy, the Commission must be satisfied that the position was no longer required to be performed by anyone because of operational changes to the employer. 28

[31] The Act does not define the term ‘operational requirements’. However, the term ‘operational requirements’ appears to be of broad import. Changes to the operational requirements of the enterprise can arise from external events and internal events. It permits consideration of many matters including the state of the market in which the business operates and the application of good management to the business. 29 For example, a downturn in trade that reduces the number of employees required and internal matters, such as decisions that result from a reassessment or reappraisal conducted by the business of its own needs,30 can constitute operational reasons. Ultimately, it is the enterprise that determines what its operational requirements are.

[32] Furthermore, an employee may still be genuinely made redundant when there are aspects of the employee’s duties still being performed by other employees, 31 including where there is a redistribution of tasks done by a particular person between several other employees, that result in the person’s job no longer existing.32 It should be noted it is the ‘job’ that is no longer required to be performed, rather than the ‘duties’.33 The onus rests with the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements.34

[33] In brief, I am satisfied that there were operational reasons why Ms Vidler’s position was no longer required notwithstanding the shortcomings in the evidential case led by Satterley.

[34] There were no records or direct evidence adduced to substantiate Mr Satterley’s evidence that the Project had been underperforming, it faced a deteriorating position, and there was pressure on the SPG. However, Ms Vidler did not challenge that she worked four days a week assisting Mr Buckley on a project that was netting only two sales a month and was losing a substantial amount of money. Further, the financial situation as described by Mr Satterley in his witness statement was not successfully rebutted, and the evidence that Ms Vidler’s position had not been filled subsequent to her dismissal was compelling.

[35] The restructure of the business involved not only the redundancy of Ms Vidler’s position, but that of another project position (a Business Development Manager position). Further, while Mr Satterley initially identified that four positions would need to be made redundant, this was averted by the resignation of the Project Director and General Manager Development. Such evidence was uncontroversial.

[36] Mr Satterley stated that the duties previously undertaken by the two Business Development Managers (including Ms Vidler) would be reassigned to existing staff. 35

[37] Ms Vidler contended that her position continued to exist because the SPG was obliged to provide the position under the contract it had with TPRC. While Mr Satterley gave evidence that the SPG had an onerous contract with the TPRC, which included provisions on oversight of, and last say on, staffing levels and staff members working on its project, 36 it does not follow that such contractual obligations had bearing on whether there was a genuine redundancy of Ms Vidler’s position.

[38] SPG may or may not have been contractually obliged to provide Ms Vidler’s position. However, it must be remembered that SPG is not the employing entity. Further, such obligation did not, in my view, fetter Satterley’s authority to structure its organisation as it so chose, including making of certain positions redundant. Of course, depending on the terms of the contract between the SPG and TPRC, a failure to provide Ms Vidler’s position may have resulted in a breach of the commercial contract between the two parties. Although, a breach of a commercial contract between two entities not party to this matter has little, if not no, bearing on whether there has been a genuine redundancy of Ms Vidler’s position.

[39] If an employer decides that its operational requirements have changed and, as a result, it no longer wants a particular role performed by anyone, this is plainly enough for the purpose of s 389(1)(a) of the Act. It follows from my analysis above that there has been a change in the operational requirements for the purposes of s 389, and the redundant position was no longer required to be performed by anyone because of this. While some of the duties of the position may have persisted, the focus is on whether the job has survived. 37

Selection for dismissal

[40] It appeared Ms Vidler was pressing that her selection for redundancy, as opposed to that of her colleagues, rendered the reason for dismissal invalid or not a genuine redundancy. So much is evident from Ms Vidler’s submission that Satterley had a suitable and logical alternative option available, which would have enabled her position to be retained; that option was to make one of the other Business Development Manager positions redundant instead of hers. Further, Ms Vidler drew attention to the decision of the Full Court in Kenefick v Australian Submarine Corporation Pty Ltd (No 2) (Kenefick), 38 where the Court examined the selection of employees for redundancy who held like positions.

[41] In Kenefick there had been a need to reduce the overall number of employees in the respondent business by nine welders. The termination of employment was said to have arisen for two reasons. First, it was purported to have been based on the operational requirements of the respondent employer. Second, was the need to still retain some rather than other employees in the position of welder.

[42] The Full Court observed that without both aforementioned steps, no individual would have been dismissed. Further, the respondent employer carried the onus of showing that there was a valid reason for the selection of each of the redundant employees. The Full Court stated:

[T]hus, in the present case, the respondent made the decisions concerning the selection of each particular appellant, and determined the basis on which the selection was to be made. The respondent should justify those decisions.

[43] Drawing further upon the reasoning in Kenefick, which examined ss 170DE and 170EDA(1) of the Industrial Relations Act 1988 (Cth) (IR Act), the Full Court explained that its conclusion was consistent with the scheme of the aforementioned sections of the IR Act. However, the decision of the Full Court only addressed the issue of whether the termination of employment was for a valid reason – and not whether the redundancy was a genuine redundancy as that term is understood in s 389 of the Act, the point under current consideration.

[44] It is also timely to note that the circumstances of this case are not analogous to Kenefick. There was only one Business Development Manager for the Project, therefore, there was not a choice that had to be made. The decision to make the Business Development Manager position redundant was project dependent. It was not a case where Satterley had decided to spill all four Business Development Manager positions retaining two and therefore having to select two out for the four relevant employees to retain. Instead, positions were made redundant in accordance with the projects assessed as no longer requiring the role. This clearly differs from the circumstances in Kenefick, where multiple positions were made redundant, leaving excess employees who were thereafter selected for the remaining positions.

[45] To reiterate, the process for selecting which employee is to be made redundant is not relevant, in this case, to determining whether a dismissal is a case of ‘genuine redundancy’. Albeit its relevance may extend to the consideration of a ‘valid reason’.

Consultation

[46] The Explanatory Memorandum to the Fair Work Bill 2008 (Cth)states the following in respect of consultation in s 389 of the Act:

1550. Paragraph 389(1)(b) provides that it will not be a 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.

[47] If an employer is obliged to consult and fails to do so it is said that there cannot be a genuine redundancy. 39 Consultations should be meaningful and should be engaged in before an irreversible decision to terminate has been made.40

[48] Consultation is not perfunctory advice on what is about to happen, consultation is providing the individual, or other relevant persons, with a bona fide opportunity to influence the decision maker. 41

[49] Insofar as the obligation to consult in accordance with the relevant award was concerned, it appeared uncontentious that there was not a modern award that covered, or an enterprise agreement that applied to, Ms Vidler in her employment. It followed that there was no such obligation to consult.

Redeployment

[50] In Ulan Coal Mines Ltd v Honeysett (Honeysett)  42 the Full Bench observed that s 389(2) placed a limitation on an employer’s capacity to mount the defence that the dismissal was a case of a genuine redundancy. It expressed that the defence was not available, if it would have been reasonable to redeploy the employee; this of course is a hypothetical question answerable only by reference to all the relevant circumstances.43

[51] Whether it would have been reasonable to redeploy the employee is anchored to the point of time of the dismissal. 44 Further, in answering the question, consideration turns to 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 offered.45

[52] The consideration of the reasonableness of redeployment also involves an examination of the actions taken by the employer to redeploy the employee and the actions of the employee, that is, her or his conduct and approach to the redeployment.

[53] It was undisputed that at around the time Ms Vidler’s position had been made redundant, another position faced the same fate. Further, the resignation of two other employees appeared to have resulted in two further roles being saved.

[54] Mr Satterley gave evidence that the financial circumstances of Satterley were such that internal discussions had commenced about the need to ‘suspend staff across the board given the impending consequences of Covid 19…’. 46 While at the time of Ms Vidler’s dismissal a stand down of employees had not yet occurred, it was clearly being contemplated. Ms Vidler expressed that it was her understanding that on or around 16 April 2020, 10 to 20 of SPG’s operational staff were stood down. Although the circumstances of a business post dismissal may not prove relevant as to whether it was reasonable to redeploy an employee, the evidence, at the very least, appears to support Mr Satterley’s evidence that ‘suspending’ employees had in fact been contemplated at the time of, or just preceding, Ms Vidler’s dismissal. This leads to a plausible inference that where multiple ‘suspensions’ were being considered, the reasonableness of redeploying an employee in such circumstances would appear questionable.

[55] There is no evidence that there were any other positions that Ms Vidler could have been redeployed into. To argue that Ms Vidler should have been redeployed into one of the two remaining Business Development Manager positions amounts to contending that one of those two employees should have been dismissed, rather than Ms Vidler. As already broached, the issue concerning the selection of employees for redundancy has its bearing on whether there was a valid reason for dismissal, and not the jurisdictional objection before me. I do not intend to repeat that which is outlined in paragraph [45].

[56] In light of all of the circumstances, I have arrived at the conclusion that it was not reasonable to redeploy Ms Vidler.

Conclusion

[57] I have found that the dismissal of Ms Vidler was by way of genuine redundancy. Her application for relief from unfair dismissal is therefore dismissed. An order dismissing the application will be issued concurrently. 47

DEPUTY PRESIDENT

Appearances:

Ms L Vidler, Applicant;
Cav. M Saraceni, of Francis Burt Chambers, for the Respondent.

Hearing details:

2020:
Perth;
June 30.

Printed by authority of the Commonwealth Government Printer

<PR720457>

 1 Witness Statement of Nigel Satterley [3].

 2   Ibid.

 3 Ibid [5].

 4 Ibid [6].

 5 Ibid [8].

 6 Ibid [9].

 7 Ibid [10].

 8 Ibid [15].

 9 Witness Statement of Nadine Salvigny [4].

 10 Ibid [15].

 11 Ibid [17].

 12   Ibid [18] – [19].

 13 Witness Statement of Nadine Salvigny [5].

 14 Witness Statement of Nigel Satterley [21].

 15   Ibid.

 16 Ibid [23].

 17 Witness Statement of Lauren Vidler [43].

 18 Witness Statement of Nigel Satterley [26].

 19   Ibid.

 20   Ibid.

 21 Witness Statement of Nadine Salvigny [9].

 22 Witness Statement of Lauren Vidler [46].

 23 Witness Statement of Nadine Salvigny [10].

 24   Ibid [2 (j)].

 25 Ibid [48].

 26 Witness Statement of Lauren Vidler [48].

 27 Witness Statement of Nadine Salvigny [20].

 28   Fair Work Act 2009 (Cth), s 389(1)(a).

 29   Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.

 30   Yitzhak Shachar v Electrical Home Aids Pty Ltd t/a Godfreys[2018] FWC 4892.

 31   Dibb v Federal Commissioner of Taxation (2004) 136 FCR 388, 404 - 405.

 32   Explanatory Memorandum, Fair Work Bill 2008 (Cth), [1548]; Kekeris v A. Hartrodt Australia Pty Ltd T/A A.Hartrodt[2010] FWA 674.

 33   Ulan Coal Mines Ltd v Howarth (2010) 196 IR 32, [17].

 34   Keiselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864, [34].

 35 Witness Statement of Nigel Satterley [22].

 36 Ibid [6].

 37   Kekeris v A.Hartrodt Australia[2010] FWA 674.

 38 (1996) 65 IR 366.

 39   See also UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263.

 40   Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company (1998) 88 IR 202.

 41   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodaphone Network Pty Ltd [2001] AIRC PR911257, [25].

 42   [2010] FWAFB 7578.

 43   Ulan Coal Mines Ltd v Honeysett[2010] FWAFB 7578, [26].

 44 Ibid [28].

 45   Ibid.

 46 Witness Statement of Nigel Satterley [23].

 47   PR721381.