Margarita Kuzmina v Sprouts Management Pty Ltd

[2021] FWC 4976

[2021] FWC 4976

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Margarita Kuzmina
v
Sprouts Management Pty Ltd
(U2021/4704)

DEPUTY PRESIDENT BOYCE SYDNEY, 23 AUGUST 2021

Application for an unfair dismissal remedy – jurisdictional objection by respondent – “genuine redundancy” – business closure – sale of land – redevelopment of building – application dismissed

Introduction

[1] This Decision was originally made on an ex-tempore basis on transcript. In publishing these Reasons, I have taken the opportunity to revise, make additions to, and/or amend same in accordance with the principles stated by Kirby J in Ex Tempore Judgments - Reasons on the Run (1995) 25 UWALRev 213 (at 229-230, including the authorities cited therein), and the New South Wales Court of Appeal in Bar-Mordecai v Rotman & Ors [2000] NSWCA 123 (at [193]-[195], including the authorities cited therein).

[2] Ms Margarita Kuzmina (Applicant) has filed a Form F2 with the Fair Work Commission (Commission), being an application for an unfair dismissal remedy (Application). By way of that Application, the Applicant claims that she was dismissed from her employment with Sprouts Management Pty Ltd (Respondent) and that her dismissal was “unfair” within the meaning of Part 3-2 of the Fair Work Act 2009 (Act). The Application was filed on 31 May 2021.

[3] In the Form F3 Employer Response filed with the Commission, the Respondent asserts that the Applicant’s dismissal was a case of “genuine redundancy” within the meaning of s.389 of the Act. This Decision concerns the determination of this genuine redundancy jurisdictional objection.

[4] At the hearing, the Applicant appeared for herself, and Ms Carol Lin, Director, appeared for the Respondent.

Background

[5] The Applicant was first employed by the Respondent on 15 August 2015. On 19 September 2017, she was promoted to Centre Manager. That role is subject to a contract of employment made between the parties MADE on 18 September 2017.

[6] It is not in dispute that the building that the Respondent’s childcare centre (Cremorne Little Sprouts) operates from, at 139 Holt Avenue, Cremorne, was sold by the Respondent, and was subject to an approved development application. It appears that the process in relation to the sale of the property, and the development application, has been ongoing for some time, and has been no secret. Staff, and parents/carers, have been kept aware of progress since the sale occurred (especially given parents/carers would need to eventually make alternative childcare arrangements).

[7] On 6 April 2021, the Respondent sent the Applicant correspondence commencing a consultation process regarding the closure of the Cremorne Little Sprouts (Consultation Letter). Relevantly, the Consultation Letter (which was sent to all staff members) states:

“After months of consideration, we made the very tough decision to surrender the lease for this property. Given the purchaser intends to commence construction on the surrounding sites, we did not feel it would be safe to continue running a childcare centre next to this.

In light of this, we have reluctantly decided to cease our current Cremorne operations.

A possible and likely outcome of this closure, is the end of your employment at Little Sprouts.”

[8] The Consultation Letter also:

(a) points out that this is difficult information for employees to process, and says that a definite and final decision will be made on 12 April 2021. It goes on to state, “We will require you to work out your 4-week notice period to finish on Friday, 18 June 2021”;

(b) provides employees with the opportunity, either over the phone or in person, to raise any issues about the impact of the closure upon them, and any measures that can be taken to minimise such impact. Any issues or suggestions in this regard should be provided promptly, and by no later than 9 April 2021;

(c) on the issue of redeployment, states:

“We have reviewed the needs of the organisation, and the opportunities to offer you redeployment. Unfortunately, we have not been able to identify any suitable redeployment opportunities for you at this time, within Little Sprouts.

If you are aware of any opportunities for which you would like to be considered, please let us know.”; and

(d) identifies the amount of redundancy (severance) payment that the Applicant will receive, along with any other unused accrued entitlements.

[9] On 12 April 2021, the Respondent sent the Applicant (and other staff) a further letter which confirmed the Respondent’s decision to close Cremorne Little Sprouts by the end of June 2021 (“although the precise date is yet to be confirmed”), that the business operations would immediately wind down, and that the childcare centre would be ceasing additional child intakes immediately (whilst at the same time divesting itself of existing children placements to other childcare centres at the earliest opportunity) (Redundancy Letter).

[10] The Redundancy Letter also:

(a) confirms that there is no “suitable redeployment opportunities for [the Applicant] in any of the related entities” of the Respondent;

(b) states that “[a]s such your employment with Little Sprouts will terminate on 11 May 2021 and you will receive the following termination” payments - being ten weeks’ severance (redundancy) payment, three weeks payment in lieu of notice, along with any outstanding wages, and any leave or other entitlements owing; and

(c) provides that employees are able to contact Ms Lin for further information or if they have any questions, thanks each employee for their contribution to Cremorne Little Sprouts, and wishes employees the best into the future.

[11] I note that the Applicant was paid three weeks in lieu of notice. The Applicant raises an objection in relation to the notice payment being made to her in lieu, having regard to the fact that she did not have that opportunity to say goodbye to other employees, parents or children, and that the Respondent did not let her re-enter the centre’s premises after her termination to collect her personal belongings (albeit they were otherwise supplied to her).

[12] As far as the legal position on the payment of notice, or the working out of notice, that is a matter that is totally within the discretion of the Respondent. Whilst the Applicant may consider her treatment objectionable, from the Commission’s perspective, whether an employee works out their notice period, or is paid in lieu of notice, is not a relevant consideration in the context of this jurisdictional objection before the Commission.

Genuine redundancy

[13] Section 389 of the Act provides the statutory definition as to what qualifies as a “genuine redundancy”:

“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”.

[14] In view of s.389, and for the purposes of the Commission being satisfied that a dismissal was a case of genuine redundancy, there are three questions that need to be answered:

(a) Was the Applicant’s job no longer required to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise?

(b) Did the Respondent comply with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy?

(c) Would it have been reasonable in all the circumstances for the Applicant to have been redeployed within the Respondent’s enterprise, or an associated entity of the Respondent?

Was the Applicant’s job no longer required to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise?

[15] Sub-section 389(1)(a) of the Act provides that a person’s dismissal was a case of genuine redundancy if 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.

[16] These words have long been used and applied in industrial tribunals and courts as a practical definition of redundancy. 1 The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will be a case of genuine redundancy:

“1547 Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548 The following are possible examples of a change in the operational requirements of an enterprise:

· a machine is now available to do the job performed by the employee;

· the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

· the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists”.

[17] Further, it has been held that 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”. It has also been held 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”. 2

[18] Put another way, the test is not whether the person’s duties survive. The test is whether the job previously performed by an employee still exists. 3

[19] Having regard to the undisputed evidence in these proceedings, I find that due to the closure of Cremorne Little Sprouts, the Applicant’s position of Centre Manager (at that childcare centre) no longer exists. As far as the question as to whether the Applicant’s job was no longer required to be performed by anyone due to operational changes in the Respondent’s business, that question must also be answered in the affirmative (i.e. the closure of the business constitutes a change in the operational requirements of the Respondent’s enterprise).

[20] I note that the Applicant makes assertions against the Respondent (in her statement provided to the Commission) as to a lack of bona fides surrounding her redundancy. For example, the Applicant states:

“In terms of my redundancy, I believe that it was retaliation for opening my work compensation case (which I opened on 13th of March 2020 and it is still open) for bullying. Also, I believe that they could not have me on site as they lied to parents that I am unfit for work, so that is why they paid me a notice period without attending the work despite the fact that this [sic] actions would put me under stress.”

[21] I do not consider assertions such as these to be relevant to my determination of the genuine redundancy jurisdictional objection in this matter. This is especially so given my finding that the Cremorne Little Sprouts was definitely closing (with the building to be demolished) in the third quarter of 2021.

Did the Respondent comply with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy?

[22] The second question to be answered is whether the Respondent has complied with any consultation requirements under an award or enterprise agreement. I note that consultation must be “genuine”, which requires the provision of relevant information to an employee/s to allow them to be fully informed of the Respondent’s decision to make their position redundant (subject to any confidentiality requirements). It also requires that there be a reasonable timeframe for the relevant employee/s to provide feedback. An employee is not required to provide feedback, they merely must be given a reasonable opportunity to do so. What is a reasonable opportunity will depend upon the facts and circumstances of a particular case, having regard to the nature of the decision being made.

[23] For example, an organisation that needs to restructure a large number of roles over an extended timeframe may well require a longer period of consultation for it to be reasonable. Conversely, in relation to the closure of a business, where there is a foreseeable (albeit not necessarily definite) date upon which that closure will occur, and there is no appropriate opportunity for a Respondent to alter that date (or the fact of closure), may mean that a shorted consultation period is reasonable.

[24] In this case, the Consultation Letter provided the Applicant with the ability to provide feedback to Ms Lin (in writing or verbally) in relation to the Respondent’s final decision to make her position redundant. Further, given the closure of the Cremorne operations, nothing the Applicant could have said or done would have altered the business’ closure. There is no evidence of the Applicant making any contact with the Respondent in relation to the opportunity (and offer) provided to her to provide feedback pursuant to the terms of the Consultation Letter.

[25] I note that the Applicant was covered by a Modern Award (Children’s Services Award 2020), which contains the standard redundancy consultation provision at Clause 8.

[26] In my view, the Consultation Letter relevantly complies with c=Clause 8 of the Award in terms of setting out relevant information to the Applicant, asking for feedback from the Applicant, and asking the Applicant whether there are any alternative positions which she believed she was capable of, and qualified to, perform. The period of three days to do so was in my view reasonable having regard to the fact that the business was closing.

[27] Having regard to all the circumstances of this case, I find that the Consultation Letter (by reference to the contents therein, and the three-day timeframe for feedback) was sufficient for the Respondent to have complied with the requirements of the award in relation to consultation. I therefore conclude that the Respondent has complied with its consultation requirements.

Would it have been reasonable in all the circumstances for the Applicant to have been redeployed within the Respondent’s enterprise, or an associated entity of the Respondent?

[28] Sub-section 389(2) of the Act provides that a person's dismissal cannot be a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise, or an associated entity of the employer.

[29] In my view, the correct interpretation of subsection 389(2) remains as stated in Ulan Coal Mines Limited v A. Honeysett & Ors: 4

“[26] [Subsection 389(2)] must be seen in its full context. It only applies when there has been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of genuine redundancy the employer has a complete defence to the application. Section 389(2) places a limitation on the employer’s capacity to mount such a defence. The defence is not available if it would have been reasonable to redeploy the employee. The exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances.

…

[28] … [T]he question posed by s.389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include 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 which is offered”.

(emphasis added)

[30] In her evidence before the Commission, the Applicant says that she was qualified for an early childhood teacher position that was vacant and available at one of the Respondent’s other childcare centres. In support of this, the Applicant provided teacher accreditation documentation from the New South Wales Education Standards Authority (NSW ESA) that identifies that she, as at the time of the hearing, is indeed qualified as an early childhood teacher.

[31] The Applicant acknowledges that she would have needed to take up this redeployment under a valid migrant sponsorship arrangement, but says that this could have easily occurred if the Respondent was willing to offer her the early childhood teacher position on that basis (which she asserts that the Respondent was able to do if it chose to do so).

[32] Ms Lin responded to this evidence by making the following points:

(a) The Consultation Letter provided the Applicant with the opportunity to provide feedback or make any suggestions she wished to make in relation to redeployment. She did not take up this opportunity at the time. Ms Lin says that the first time that she was aware that the Applicant had a view as to any redeployment opportunities, was at the conciliation of her unfair dismissal before the Commission. The evidence of Ms Lin in this regard was not contested.

(b) The advertisement for the early childhood teacher role that the Applicant is referring to was run between 6 April 2021 and 6 May 2021, however, the Applicant’s accreditation was only determined by the NSW ESA on 11 May 2021. In other words, the Applicant was not accredited by the NSW ESA to be an early childhood teacher prior to 11 May 2021.

(c) There was and remains no migrant sponsorship arrangement available (as an option through the relevant government department) in relation to the early childhood teacher role that the applicant refers to, which has at all times been a requirement of the Applicant’s employment with, and engagement by, the Respondent.

[33] My findings on the evidence are firstly, the Applicant did not raise any issues of redeployment at the time she had the opportunity to do so; and secondly, as at the time the relevant early childhood teacher position at the Respondent’s other childcare facility was advertised (i.e. between 6 April 2021 and 6 May 2021), the Applicant was not qualified for the role, with that qualification only being valid and operative from 11 May 2021. Whether a redundancy is genuine (including as to any available and suitable redeployment opportunities) is to be assessed at the time the decision to make an employee redundant occurs. There is no ability or opportunity in my view to retrospectively assess a redeployment opportunity having regard to qualifications that have only been confirmed subsequent to the date of a dismissal. Even if that broad proposition is wrong in the general sense, it certainly applies in the facts and circumstances of this case. Hence, having regard to s.389(2) of the Act, I do consider that it would have been reasonable in all the circumstances for redeployment to have occurred in respect of the Applicant (as an alternative to redundancy).

Conclusion

[34] Having regard to the evidence in this matter, the submissions of the parties, and my conclusions as set out in this Decision, I find that the Applicant’s dismissal was a case “genuine redundancy” within the meaning of s.389 of the Act. It follows from this finding that the Commission has no jurisdiction to hear or determine the Applicant’s unfair dismissal claim. The Application filed by the Applicant is dismissed by way of Order [PR732770].

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR732771>

 1   Ulan Coal Mines Limited v Henry Jon Howarth & Ors[2010] FWAFB 3488 at [15] (Boulton J, Drake SDP, and McKenna C), citing R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Cooperative Limited (1977) 16 SASR 6; Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115; Short v F.W. Hercus Pty Limited (1993) 40 FCR 511.

 2   Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308 (Ryan J), cited with approval in Ulan Coal Mines Limited v Henry Jon Howarth & Ors[2010] FWAFB 3488 at [17] (Boulton J, Drake SDP, and McKenna C). See also: Dibb v Commissioner of Taxation (2004) 136 FCR 388; [2004] FCAFC 126 at [43]-[44] (Spender, Dowsett, and Allsop JJ).

 3   Kekeris v A. Hartrodt Australia Pty Ltd[2010] FWA 674 (Hamberger SDP), at [27].

 4   [2010] FWAFB 3488.