Liangxin (James) Zhu v Shandong Energy Australia Pty Ltd
[2023] FWC 1151
•30 MAY 2023
| [2023] FWC 1151 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Liangxin (James) Zhu
v
Shandong Energy Australia Pty Ltd
(U2023/332)
| DEPUTY PRESIDENT LAKE | BRISBANE, 30 MAY 2023 |
Application for unfair dismissal remedy –whether a genuine redundancy – found to be a genuine redundancy – application dismissed.
Mr Liangxin (James) Zhu (the Applicant) has made an application seeking a remedy for unfair dismissal from Shandong Energy Australia Pty Ltd (‘the Respondent’ or ‘Shandong’) under s.394 of the Fair Work Act 2009 (the Act). The application was made on 12 January 2023.
In the Applicant’s Form F2, he states that he began his employment with the Respondent on 13 November 2012 and that he was made redundant on 31 December 2022. The Applicant states it was not a genuine redundancy as there were three coal projects based in Queensland to which he could have been redeployed to.
The Respondent raised a jurisdictional objection that there was genuine redundancy. I issued Directions for filing of material and listed the matter for Hearing.
The Hearing was held on 28 March 2023 via Microsoft Teams. The Applicant gave evidence on his own behalf. Mr Trent Sebbens from Ashurst Australia appeared and gave evidence on behalf of the Respondent.
I have considered all the evidence and submissions in determining whether the dismissal can be classified as a genuine redundancy within the meaning of the Act. I am satisfied that the Applicant’s dismissal had arisen from genuine redundancy and is not eligible to make a claim for unfair dismissal. I provide the reasons below.
LEGISLATION
Section 390(1) of the Act sets out the circumstances in which the Commission may grant a remedy by way of reinstatement or compensation for unfair dismissal. It provides:
390 When the FWC may order remedy for unfair dismissal
(1)Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).’
Section 396 of the Act sets out a number of matters which the Commission must consider before turning to the merits of an unfair dismissal application. It provides:
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:
1.whether the application was made within the period required in subsection 394(2);
2.whether the person was protected from unfair dismissal;
3.whether the dismissal was consistent with the Small Business Fair Dismissal Code;
4.whether the dismissal was a case of genuine redundancy.
As is made clear from the above provisions of the Act, I must determine whether the termination of the Applicant was a genuine redundancy before considering the merits of the application.
Section 389 of the Act defines genuine redundancy for the purposes of s.396 as follows:
(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.
CONSIDERATION
Genuine redundancy
I am required to consider whether there is a genuine redundancy per s.396(d) as an initial matter before considering the merits. In so doing, I must consider the criteria under s.389 of the Act.
Did the Applicant’s employer no longer require the Applicant’s job to be performed by anyone because of operational requirements of the employer’s enterprise?
Where there is no longer any function or duty to be performed by an employee, his or her position becomes redundant even where aspects of that employee’s duties are still being performed by other employees.[1]
Hamberger SDP considered the issues arising from restructuring or downsizing when dealing with genuine redundancy in Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt.[2] The test is whether the previous job has survived the restructure or downsizing, rather than a question as to whether the duties have survived in some form.
In Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488, the Full Bench considered and applied the decision of Ryan J in Jones v Department of Energy and Minerals (1995) 60 IR 304 stating:
[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)”
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
‘Operational requirements’ is a broad term which encompasses present performance of the business, the state of the market in which the business operates, steps to improve efficiency by installing new processes/equipment/skills, by arranging labour to be used more productively or the application of good management to the business.
The operational requirements of the business no longer needed Mr Zhu to perform his role as a Project Director. It was not a role that survived the restructure. There were multiple indications of this, which were acknowledged in both submissions.
The Project Director role which Mr Zhu had with Shandong was no longer required to be performed as Shandong had outsourced the coal tenements in Queensland to Yancoal Australia Limited (‘Yancoal’) through a Management Services Agreement. As a result, Mr Zhu’s role was outsourced to different Yancoal employees. It is acknowledged by the Respondent that Mr Zhu’s duties have survived in some form, but his actual job did not survive the restructuring. Mr Zhu’s role was no longer required by Shandong.
Furthermore, Mr Zhu was the last remaining employee in Shandong Energy Australia Pty Ltd in the Brisbane office. The Respondent kept Mr Zhu in the role to affect a handover resulting from the outsourcing. The Brisbane office closed on 31 March 2022 which further indicated that his role was no longer required.
The two directors of Shandong Energy Co Ltd who had oversight of the coal project in Queensland returned to China as they were no longer needed. This was another sign that Mr Zhu’s role would be made genuinely redundant due to operational requirements.
It is clear from the Management Services Agreement and the closing of the Shandong office in Brisbane that the Respondent was able to establish that they no longer required the Applicant’s specific job to be performed by anyone even though his duties may have survived in some form, performed by Mr Boyun Xu and the other workers of Yancoal.
2.Did the Respondent comply with any obligations in a modern award or enterprise agreement that applied to the employment to consult about redundancy?
The obligation on an employer to consult about redundancy only arises when a modern award or enterprise agreement applies to an employee and that modern award or enterprise agreement contains requirements to consult about redundancy. There is no legislative requirement to consult about the redundancy before a decision is made to make an employee redundant.
There is no applicable enterprise agreement or modern award in this matter. The Applicant was consulted regarding his position in becoming redundant and there were no redeployment opportunities available under an applicable Award which would require the Respondent to offer him a different position within the Company.
3.Was it 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?
In Helensburugh Coal Pty Ltd v Bartley[2021] FWCFB 2871 at [8], the Full Bench reaffirmed the rules of redeployment set out by Vice President Hatcher in Pettet and Ors v Mt Arthur Coal Pty Ltd[2015] FWC 2851 at [6] in relation to s.389(2) of the FW Act as follows:
“The principles concerning the interpretation and application of s.389(2) have been stated in two Full Bench decisions, Ulan Coal Mines Ltd v Honeysett and Technical and Further Education Commission t/a TAFE NSW v Pykett. Those principles were summarised in Huang v Forgacs Engineering Pty Limited as follows:
(1) The exclusion in s.389(2) poses a hypothetical question which must be answered by reference to all of the relevant circumstances.
(2) The question is concerned with circumstances which pertained at the time of the dismissal.
(3) In order to conclude that it would have been reasonable to redeploy the dismissed person, the Commission must find, on the balance of probabilities, that 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.
(4) A number of matters are capable of being relevant in answering the question, including 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 and the remuneration which it offered.”
The Full Bench stated that the work to which an employee might be redeployed must, ultimately, be work over which the employer has control.[3]
The Respondent states the lack of managerial integration of the Respondent and Yancoal is critical in understanding their limitations in redeploying the Applicant.[4] The Respondent could not direct Yancoal to employ Mr Zhu. The Management Services Agreement between the two entities Shandong and Yancoal demonstrated that neither had control and that Shandong could not direct Yancoal to hire Mr Zhu.
The Applicant contests that his role was still required by the Respondent. Some of his responsibilities were transferred to Boyun Xu who is the Executive General Manager of Yancoal Australia Limited.
On balance, there was no longer a suitable role for the Applicant after Shandong had entered into the Management Services Agreement with Yancoal regarding the operation of the coal tenements. The operational requirements of the business had changed. There was no suitable role in Brisbane considering the Applicant was the last remaining employee in that office. Furthermore, the role of a Chief Mining Engineer was not found to be suitable for the Applicant, as his skills and experiences as a Project Manager were vastly different.
I accept some of Mr Zhu’s remaining duties may have been given to Mr Boyun Xu. However, this was a role that was now outside the employer’s enterprise, and although it may be associated entity, it was outside Shandong’s control.
I am satisfied that redeployment was not available in this instance and the employer had fulfilled their obligations under s.389(2).
CONCLUSION
I am satisfied that the dismissal of the Applicant was a genuine redundancy under s.389 of the Act. The jurisdictional objection of genuine redundancy is upheld and I order this Application to be dismissed.
DEPUTY PRESIDENT
[1] Jones v Department of Energy and Minerals [1995] IRCA 292 (16 June 1995), [(1995) 60 IR 304 at p. 308 (Ryan J)]; cited with approval in Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488 (Boulton J, Drake SDP, McKenna C, 10 May 2010) at para. 17, [(2010) 196 IR 32].
[2] [2010] FWA 674.
[3] Helensburugh Coal Pty Ltd v Bartley and Anor [2021] FWCFB 2871 at [54].
[4] Daniel Stickley v Kestrel Coal Pty Ltd [2015] FWCFB 4760 at [16]-[17]; Ulan at [26]-[28]; Pettet v Mt Arthur Coal Pty Ltd[2015] FWC 2851 at [82]; Cassandra Louise Smith (nee Kay) v UQ Sport Ltd[2022] FWC 328 at [90].
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