Mathew Cliffe v Construction Glazing Pty Ltd

[2015] FWC 1008

[2015] FWC 1008

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mathew Cliffe
v
Construction Glazing Pty Ltd
(U2014/11773)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 11 FEBRUARY 2015

Application for relief from unfair dismissal - genuine redundancy - consultation requirements - redeployment - workers compensation.

[1] On 18 August 2014, Mr Cliffe lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) with respect to the termination of his employment by Construction Glazing Pty Ltd (Construction Glazing). The matter was not settled through the conciliation process and was referred to me for determination. Construction Glazing objected to the application on the basis that the termination of Mr Cliffe’s employment was a case of genuine redundancy.

[2] The parties agreed that a single hearing would address submissions and evidence relative to this genuine redundancy issue and the merits of the application. I note that the genuine redundancy issue is the only initial or jurisdictional issue relevant to this application.

[3] The matter was the subject of hearings on 27 October 2014 and 10 December 2014. Mr Cliffe was represented by Mr Ats, of counsel, and Construction Glazing by Mr Earls, of counsel. Grants of permission were made in each case pursuant to s.596(2)(a). I have also taken into account the written submission provided subsequent to this hearing including final submissions received in mid January 2015.

The background

[4] Construction Glazing is one of a group of companies within the Chevron Group.Mr Cliffe worked for Construction Glazing from August 2007 to the termination of his employment which took effect on 28 July 2014. He undertook various glazing duties within the Construction Glazing factory, involving on-site work. At the time of the termination of his employment, Mr Cliffe was suffering from a workplace injury. He worked under restricted duties from 24 January 2014 until 6 May 2014. He was away from work from that date. He was in receipt of workers compensation payments over that time. These workers compensation payments continued after the termination of his employment. On 27 May 2014, Mr Cliffe was provided with a formal advice 1 that Construction Glazing was going to make a major change in the workplace, which may result in his redundancy. This letter provided Mr Cliffe with 28 days notice of that redundancy. The prospect of redundancies at Construction Glazing was bought to the attention of the Construction, Forestry, Mining and Energy Union (CFMEU) shortly after this. The CFMEU then corresponded with the Master Builders Association (MBA)2 about the four proposed redundancies. I note that sometime after 27 May 2014, the CFMEU received formal advice of the redundancy proposals. That letter had been sent to a former CFMEU address.

[5] The CFMEU lodged dispute notifications with the Fair Work Commission (FWC) on 29 May 2014 and ultimately engaged in discussions with Mr Kovacic of Construction Glazing on or around 29 May 2014. 3 The dispute notification was not apparently pursued. Mr Kirner, the SA Branch Secretary of the CFMEU Forestry and Furniture Products Division, was initially involved in the discussions with Construction Glazing. Mr Birch from the CFMEU, who is responsible for representing CFMEU members in relation to workers compensation issues, subsequently represented Mr Cliffe. On 23 June 2014, Construction Glazing confirmed to Mr Cliffe that his position was redundant but, to meet WorkCover requirements, he would be given a further four weeks’ notice. Formal advice to this effect was provided in a letter dated 25 June 2014. This letter confirmed that Mr Cliffe was to be made redundant effective 28 July 2014 and sought discussions with him.

[6] The parties are in dispute over the extent and nature of the various consultations and consultation attempts relative to the termination of Mr Cliffe’s employment. I have addressed this issue later in this decision.

[7] Mr Cliffe asserts that the termination of his employment did not occur in a manner consistent with s.389 such that it represented a genuine redundancy. Specifically, Mr Cliffe asserts that Construction Glazing did not comply with the consultation provisions in the relevant agreement, and that consistent with s.389(2) it was reasonable in all the circumstances for Construction Glazing to redeploy him. Accordingly, Mr Cliffe asserts that s.389, when read in concert with s.385, does not prevent him from pursuing this application. Mr Cliffe then asserts that when his circumstances are considered against the factors in s.387, the termination of his employment was harsh, unjust and unreasonable in that there was no valid reason for it, he was not properly notified of it, and the termination had a harsh impact on him. Mr Cliffe seeks reinstatement.

[8] The Construction Glazing position is that the termination of Mr Cliffe’s employment occurred for a genuine operational reason, that the consultation process it followed met the requirements of the relevant agreement, and that there were no available positions to which Mr Cliffe could have been reasonably redeployed at the time of the termination of his employment. Accordingly, Construction Glazing asserts that Mr Cliffe is jurisdictionally prevented from pursuing his application. In terms of the merits of the application, Construction Glazing asserts that there was a valid reason for the dismissal and that it occurred in a procedurally fair manner.

The Evidence

[9] Whilst I have considered all of the evidence put to me, I have briefly summarised the evidence of the witnesses. This matter was vigorously argued before me. However, the nature of the witness evidence before me is significant. Both parties elected not to call persons whom I consider were likely to be able to provide evidence relevant to the issues to be determined. With respect to Construction Glazing, its Human Resources Manager Ms Catt appears to have been actively involved in the matter but was not called. Additionally, the assessment of the employees selected for redundancy appears to have been undertaken by a Mr McClory who did not give evidence. Further, the evidence of Mr Kovacic is critical to the Construction Glazing case. Mr Kovacic’s evidence was that, since suffering a stroke, his short term memory was affected. I have taken this into account in considering his evidence. In Mr Cliffe’s case, it is clear that he was represented for a substantial time by Mr Birch, from the CFMEU, but Mr Birch was not called to give evidence. As a consequence of the witnesses not called, normal Jones and Dunkel 4 inferences are difficult in this situation, and I have reached my conclusions about the relevant facts on the best available evidence before me. I have also taken into account the evidence of Mr Kirner to the effect that he overheard Mr Kovacic discussing the evidence; that at least one of the other Construction Glazing witnesses would give on 27 October 2014.

[10] As a matter of convenience, I have initially summarised the Construction Glazing witness evidence.

[11] Mr Kovacic is the General Manager of Construction Glazing, and has managerial control over Mount Barker Glass glazing operations. He is a Director of the other companies in the Chevron Group, being:

● Mount Barker Glass Pty Ltd
● Kingswood Aluminium Pty Ltd
● Chevron Glass Pty Ltd
● Cutler Brands Pty Ltd

[12] Mr Kovacic’s evidence went to the operation of these companies and to the restructuring which occurred in 2014. He detailed the actions he initiated to select employees for redundancy and the steps he took to advise those selected employees of proposed redundancies. His evidence went to his subsequent involvement in discussions with those employees and the CFMEU. His evidence went to consideration of redeployment options. He also addressed the ultimate termination of Mr Cliffe’s employment.

[13] Mr Rowswell is the General Manager of Chevron Glass Pty Ltd (Chevron Glass). His evidence went to his assessment Mr Cliffe’s capacity to undertake work for Chevron Glass and to employment arrangements within Chevron Glass.

[14] Mr Haddington is the General Manager of Cutler Brands Pty Ltd (Cutler Brands). His evidence went to the involvement of Cutler Brands in printing glass bottles and to employment arrangements in this respect. It was to the effect that he did not consider that Mr Cliffe could undertake work of that nature.

[15] Mr Millar is the Director of Kingswood Aluminium Pty Ltd. His evidence went to the functions undertaken by that company, including reductions in the number of employees since April 2014.

[16] Mr Cliffe’s evidence went to his employment history and capacity to do a broad range of duties. His evidence addressed his current injury status and his anticipated future capacity to undertake work. Mr Cliffe’s evidence went to his understanding of the consultations which occurred before the actual termination of his employment and to his assessment of opportunities for his employment or redeployment within the Chevron Group.

[17] Mr Kirner is the Branch Secretary of the South Australian branch of the CFMEU Furnishing Products Division. His evidence went to his understanding of the operations of the Chevron Group and his communications with representatives of Construction Glazing over some two months before the termination of Mr Cliffe’s employment took effect.

[18] I also note that I have been provided with a substantial amount of additional documentation. Some of this goes to the operation of the workers compensation system and to documents associated with Mr Cliffe’s workers compensation claims. I have considered all of this material.

Findings

[19] Section 385 of the FW Act states:

“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.”

[20] Section 389 states:

“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.”

[21] Consequently, if the circumstances of the termination of Mr Cliffe’s employment meet the definition of a genuine redundancy, the termination of his employment cannot be regarded as unfair.

[22] In reaching a conclusion about this initial issue, I have also recognised the following factors.

[23] Mr Cliffe was engaged pursuant to the terms of the Construction Glazing Pty Ltd Enterprise Agreement 2011 (Agreement). Clause 1.11 of that Agreement provides that the model consultation provisions of the FW Act applies in relation to workplace consultation regarding major change. That model consultation term states:

“Model consultation term

(1) This term applies if the employer:

(a) has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or

(b) proposes to introduce a change to the regular roster or ordinary hours of work of employees.

Major change

(2) For a major change referred to in paragraph (1)(a):

(a) the employer must notify the relevant employees of the decision to introduce the major change; and

(b) subclauses (3) to (9) apply.

(3) The relevant employees may appoint a representative for the purposes of the procedures in this term.

(4) If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

(5) As soon as practicable after making its decision, the employer must:

(a) discuss with the relevant employees:

(i) the introduction of the change; and

(ii) the effect the change is likely to have on the employees; and

(iii) measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and

(b) for the purposes of the discussion—provide, in writing, to the relevant employees:

(i) all relevant information about the change including the nature of the change proposed; and

(ii) information about the expected effects of the change on the employees; and

(iii) any other matters likely to affect the employees.

(6) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(7) The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

(8) If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph (2)(a) and subclauses (3) and (5) are taken not to apply.

(9) In this term, a major change is likely to have a significant effect on employees if it results in:

(a) the termination of the employment of employees; or

(b) major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or

(c) the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(d) the alteration of hours of work; or

(e) the need to retrain employees; or

(f) the need to relocate employees to another workplace; or

(g) the restructuring of jobs.

Change to regular roster or ordinary hours of work

(10) For a change referred to in paragraph (1)(b):

(a) the employer must notify the relevant employees of the proposed change; and

(b) subclauses (11) to (15) apply.

(11) The relevant employees may appoint a representative for the purposes of the procedures in this term.

(12) If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the employer of the identity of the representative; the employer must recognise the representative.

(13) As soon as practicable after proposing to introduce the change, the employer must:

(a) discuss with the relevant employees the introduction of the change; and

(b) for the purposes of the discussion—provide to the relevant employees:

(i) all relevant information about the change, including the nature of the change; and

(ii) information about what the employer reasonably believes will be the effects of the change on the employees; and

(iii) information about any other matters that the employer reasonably believes are likely to affect the employees; and

(c) invite the relevant employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities).

(14) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(15) The employer must give prompt and genuine consideration to matters raised about the change by the relevant employees.

(16) In this term:

relevant employees means the employees who may be affected by a change referred to in subclause (1).”

[24] Mr Kovacic did not concede that the Chevron Group was properly described as a group of associated companies. Nevertheless, having taken the evidence about the operation and management of the businesses into account, I have concluded that the group meets the requirements so as to be associated entities. The evidence before me confirms that these companies largely operate independently but that there is a capacity, inherent in that group, for consideration of redeployment opportunities subject to the employment and market circumstances confronting each of those companies. Redeployment arrangements in this respect are generally addressed by Ms Catt.

[25] The evidence of Mr Kovacic establishes that Construction Glazing had experienced a substantial and sustained downturn in sales such that he concluded that a reduction in the number of employees was necessitated. 5 Mr Kovacic’s evidence was somewhat equivocal about the exact time at which this decision was made. I have concluded that, whilst possible redundancies were under consideration for some time and steps were taken to reduce annual leave accruals from March 2014,6 the definite decision to make four employees redundant was made in the week preceding 27 May 2014. Mr Kovacic’s evidence was that:

“13. I made an administrative employee redundant in or about mid-May. Towards the end of May, I determined that we would have to make four glaziers redundant.” 7

[26] That evidence is consistent with the steps taken by Mr Kovacic to obtain and implement a skills matrix used to select the four employees to be made redundant. 8 Mr Kovacic’s evidence was that Mr Cliffe’s direct manager, Mr McClory, completed that matrix around 24 May 2014.9 That conclusion about the timing of the redundancy process is also consistent with Mr Kovacic’s somewhat arbitrary decision that, whilst there was a business case for a greater number of redundancies, he decided on four redundancies and then proceeded to discuss redeployment opportunities with the relevant management personnel within the Chevron Group.10

[27] Mr Kovacic’s evidence went to the selection matrix applied by Construction Glazing management to determine which operational employees would be made redundant. Because Mr Cliffe had been absent from work on workers compensation since 6 May 2014, I have considered the extent to which Mr Cliffe’s worker’s compensation situation was the reason for the termination of his employment. The evidence of Mr Kovacic was that:

“17. In making the selections, I confirm that the applicant’s restrictions did not play a party in the decision making process.” 11

[28] Mr Kovacic’s evidence went further 12 to explain that workers compensation issues and costs were not taken into account in the skills assessment. Accordingly, I have concluded that the termination of Mr Cliffe’s employment did not occur because of his workers compensation status. The position adopted by the majority in UES (Int’l) Pty Ltd v Leevan Harvey13 confirms that the reasons for the selection of a particular employee for redundancy do not form part of the considerations necessary in assessing s.389.14 The termination of employment of Mr Cliffe and three other glaziers did not occur for disciplinary or performance reasons.

[29] I have noted that the South Australian worker’s compensation legislation provides for particular arrangements in the form of potential penalties when an employee is dismissed without the explicit approval of the WorkCover authority. This legislation does not prohibit an employee on workers compensation from being made redundant. It is simply the case that when an employee who is receiving workers compensation payments is made redundant for genuine operational reasons the employer may, subject to an assessment conducted by that authority, then have additional workers compensation costs imposed. In this context, the decision to dismiss Mr Cliffe may not have been the best commercial decision but that is not a factor relevant to my conclusions.

[30] Mr Cliffe does not dispute that his redundancy reflected operational reasons that were directly related to the trading position of the Construction Glazing business. Mr Cliffe has not been replaced and the evidence of Mr Kovacic 15 confirms ongoing attempts to make the business more cost competitive. Thus the first element of s.389 has been satisfied.

[31] There is a substantial conflict between the parties over the extent to which the model consultation provisions were met in Mr Cliffe’s case.

[32] The model consultation terms apply when a definite decision to introduce a major change has been made. The redundancy decision was made in the week before 27 May 2014, such that the obligations imposed by the model consultation term applied from that time.

[33] The Construction Glazing letter of 27 May 2014 was provided to Mr Cliffe and met the requirement for notification in para (2) of the Model term.

[34] I am satisfied that Mr Cliffe was represented by the CFMEU in the subsequent consultation process.

[35] The evidence of Mr Kovacic was that:

“18. On 26 May 2014, I issued consultation notices to each of the four glaziers selected for redundancy.

A copy of the notice issued to the applicant is contained as attachment “MK4”.

19. Due to the applicant’s absence, I forwarded the consultation notice by post.

20. Over the following few days, each of the other three glaziers came to see me in relation to the notice and we discussed the reasons for the retrenchments.

A copy of my calendar appointments in relation to these meeting is attached and marked “MK5”.” 16

[36] Mr Kovacic continued:

“24. On 2 June 2014, I met with Dave Kirner from the CFMEU in relation to a separate disciplinary issue relating to a Mount Barker Glass employee. At the end of this meeting, Mr Kirner raised the consultation notices issued in relation to the applicant and another employer, Patrick Bergin.

25. We discussed the reasons for the redundancies, which was the downturn in work. Mr Kirner requested voluntary redundancies to be considered. Mr Kirner also made comments in relation to using the redundant employees in lieu of subcontractors at Mount Barker Glass. I considered these issues but they were both matters that that the respondent was not willing to change its mind on.

A copy of Construction Glazing’s file note of the meeting is attached and marked “MK7”.

26. This conversation did not take very long but I left the meeting with the impression that the union understood our position and that the matters they had raised had been addressed.” 17

[37] Mr Kirner’s evidence was that on or around 28 May 2014, he telephoned Mr McClory who did not return his call. Mr Kirner then recalled a telephone discussion he had with Mr Kovacic on or about 29 May 2014. His evidence was that:

“16. I think, but am not absolutely certain, that in the end Mr Kovacic and I spoke on the morning on Thursday, 29 May 2014.

17. When we spoke I told Mr Kovacic that members had contacted me talking about redundancies. Mr Kovacic said that there would be retrenchments.

18. I said that there had been no consultation and that that was required. Mr Kovacic said that he would consult after the retrenchments. I told him that that was not acceptable. He did not alter his position in that discussion.” 18

[38] I have concluded that, whilst Mr Kovacic may have considered the CFMEU concerns had been addressed, Mr Kirner clearly did not consider this was the case. Mr Kirner then engaged with the MBA. His email to Mr Putland of the MBA of 29 May 2014 stated:

“David

The company have not consulted over proposed redundancies.

Yesterday they did not return calls and today they said they would consult after CFMEU members retrenched.

They are not complying with the 2 relevant agreements.

They are not accepting that members want union representation unless individual members call the union.

Our national office is about to lodge a redundancy dispute.

Regards,
Dave Kirner CFMEU” 19

[39] I have concluded that Mr Kirner and Mr Kovacic disagreed over the standing of the CFMEU with respect to Mr Cliffe. While clear evidence about this is not before me, it may well have been that this was the primary reason for the lodgement of dispute proceedings before the FWC.

[40] Irrespective of this, it is clear that the discussion on 2 June 2014 covered issues such as the possibility that employees could take leave as an alternative to the proposed redundancies and redeployment possibilities were discussed. Mr Kirner’s evidence was that he also raised concerns about the proposed termination of Mr Cliffe’s employment given that he was on workers compensation.

[41] I am not satisfied that the disagreement over the standing of the CFMEU impacted on the extent to which, commencing on 2 June 2014, there was consultation between Construction Glazing and the CFMEU, representing Mr Cliffe.

[42] Those discussions then continued, with Mr Birch representing Mr Cliffe. I have concluded that a substantial issue in these discussions related to the obligations established under the WorkCover legislation. Mr Birch’s email to Mr Putland of 3 July 2014 set out his concerns:

“David

I reiterate your client did not comply with section 58B/C WR and Compensation Act 1986.

Your client did not consult with our member. Your client forwarded correspondence to our member dated 27 May 2014 and in part our client stated “I will hold consultations with you” it never directly happened with Mr Cliffe. Your client also stated in the same letter “your position may be made redundant” the underline is my emphasis.

We consider it inexcusable that your client after they had made a decision to terminate our members employment to then suggest to meet or have a phone conversation to discuss the termination. It’s outlandish nonsense.

The offer is still open to your client to meet Mr Cliffe and me at the unions office at level 2 to 32 South Terrace Adelaide on 19 July 2014 at 11 AM. Please confirm or otherwise your clients preparedness to meet with us on said date.

Cheers
Les Birch
Workers Compensation Advocate
CFMEU Forestry & Furniture Division” 20

[43] Mr Putland’s reply to Mr Birch of the same date stated:

“Dear Les,

I refer to my correspondence of yesterday in respect of the employer’s compliance with sections 58B/C.

Although it is irrelevant in respect of WorkCover, our member refutes any suggestion that it did not consult with Mr Cliffe as required by the Fair Work Act and the relevant enterprise agreement. In particular the employer:

1) Notified Mr Cliffe and his representative on or around 27 May 2014 of a decision made by the employer that positions would be made redundant and this potentially included Mr Cliffe’s role. It is important to note that particular persons had not been selected for redundancy at this time;
2) Gave Mr Cliffe an opportunity to discuss the redundancy process;
3) Due to his absence, conversed with Mr Cliffe about the process over the telephone (specifically with Mr Kovacic);
4) At the direction of Mr Cliffe, met and discussed repeatedly with Mr Cliffe’s representative, Mr Kirner. Mr Kirner ably represented Mr Cliffe’s interests in respect of the selection process;
5) Notified Mr Cliffe that his position would be made redundant by letter dated 25 June 2014; and
6) Offered to meet with Mr Cliffe to discuss the redundancy decision.

The offer to meet with your member (and a representative3) next week at 11am 10 July 2014 at the employer’s office remains open and is made in good faith in order to discuss any remaining concerns or issues that Mr Cliffe may have coming out of the decision to make his role redundant. If your members elects to not attend at that meeting, that is a decision for him. I remind your member that he is still an employee of Construction Glazing until the redundancy takes effect at close of business 28 July 2014.

Regards,
David Putland
Member Counsel
Master Builders Association of SA Inc” 21

[44] Mr Kovacic’s evidence was that:

“41. On 23 July 2014, I attended a teleconference with David Putland from the Master Builders’ Association, and Mr Cliffe and Mr Birch. During this discussion, Mr Birch repeatedly made comments to the effect that the respondent was acting illegally, but neither he or the applicant put forward any practical suggestions in terms of mitigating the effect of the decision.

The respondent’s records were held by the Master Builders’ Association of South Australia, who have advised that they are unable to locate the relevant file.” 22

[45] Mr Kovacic confirmed that soon after he issued the 27 May 2014 notice, he met with the three other glaziers.

[46] The evidence establishes that in order to meet WorkCover Corporation requirements, Mr Kovacic delayed the termination of Mr Cliffe’s employment and requested that Mr Cliffe visit him. I appreciate that, at that time, Mr Cliffe was about to undergo surgery and hence was reticent to meet. However, at all material times he was represented by the CFMEU. I have noted the difficulties Construction Glazing had in arranging to meet with Mr Cliffe were exemplified by the correspondence of 16 July 2014 which stated:

“Dear Mr Cliffe

DIRECTION TO ATTEND AT MEETING

As per our letter dated 25 June 2014, the Company will make your position redundant effective 28 July 2014.

You are required and directed to attend a meeting at 9 am Wednesday 23rd July to discuss the redundancy. You may elect to attend this meeting in person or by telephone. At this meeting, you will be given an opportunity to discuss any concerns that you may have.

This is a formal meeting and your attendance is mandatory. You are reminded that you remain an employee of Construction Glazing until 28 July 2014. You can have a support person at this meeting. The person of your choice may be a work colleague, relative, friend or other representative.

Please confirm your preference in respect to whether you will attend by telephone or in person, and contact Marc Kovacic if you require any further information about this meeting.

Yours Faithfully
Marc Kovacic
GM” 23

[47] I am satisfied that the discussion requirements in clause (5) of the model consultation provisions were met through the discussions involving the CFMEU and, ultimately, Mr Cliffe. The correspondence issued to Mr Cliffe meets the requirements of that clause. Those various discussions may have been heated at times and may not have satisfied Mr Cliffe or his representatives, but I am satisfied they involved prompt consideration of the issues raised. The genuineness of that consideration is more contentious. In Ventyx Pty Ltd v Murray 24, the Full Bench considered the genuine consideration requirement. There is no doubt that the issues raised by the CFMEU on behalf of Mr Cliffe received a prompt response from Mr Kovacic. That is clear from his evidence. The more significant issue is whether Mr Kovacic genuinely considered the matters raised. Those issues need to be seen in the context that, at that time Mr Cliffe was not able to work. Consequently, this affected at least some of the consultations. I consider it relevant to the proposals for voluntary redundancies and the demand that Mr Cliffe not be dismissed because of his workers compensation claim. In these respects I have concluded that Mr Kovacic’s responses were genuine to the extent that they were based on his desire to retain the most competent employees. The instance where Mr Kovacic agreed that one of the employees selected for redundancy could be replaced by that employee’s father, who was also an employee, does not mean that, of itself, his rejection of a request for broader consideration of voluntary redundancy options lacked genuine consideration.

[48] The position adopted by the Full Bench in Ventyx 25 confirms that the obligations to discuss and consult are not synonymous with a need for agreement. The absence of agreement cannot represent a breach of the model consultation provisions. Construction Glazing considered the alternatives proposed by Mr Cliffe’s representatives. Its rejection of these does not detract from the extent to which the model consultation terms with respect to consultation were met in this instance. Consequently, as the requirements of the model consultation provision were met, I am satisfied that the requirements of s.389(1)(b) were met.

[49] The final requirement goes to s.389(2) and the consideration of redeployment opportunities.

[50] In this respect I have applied the approach adopted by the Full Bench in Ulan Coal Mines Ltd v Honeysett and Others 26 in the following terms:

“[26] First, s.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.

[27] Secondly, it is implicit in the terms of s.389(2)(b) that it might be reasonable for an employee dismissed by one employer to be redeployed within the establishment of another employer which is an entity associated with the first employer. It follows that an employer cannot succeed in a submission that redeployment would not have been reasonable merely because it would have involved redeployment to an associated entity. Whether such redeployment would have been reasonable will depend on the circumstances. The degree of managerial integration between the different entities is likely to be a relevant consideration.

[28] Thirdly, the 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.”

[51] The Full Bench continued, to make some obiter remarks about the operation of s.389(2):

“[34] It may be appropriate to make some concluding remarks about the operation of s 389(2). It is an essential part of the concept of redeployment under s 389(2)(a) that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. 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. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s 385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard. The outcome of that application would depend upon a number of other considerations.

[35] Where an employer is part of a group of associated entities which are all subject to overall managerial control by one member of the group, similar considerations are relevant. This seems to us to be a necessary implication arising from the terms of s 389(2)(b). While each case will depend on what would have been reasonable in the circumstances, subjecting a redundant employee to a competitive process for an advertised vacancy in an associated entity may lead to the conclusion that the employee was not genuinely redundant.” 27

[52] In Technical and Further Education Commission T/A TAFE NSW v L Pykett 28, a Full Bench adopted the Ulan position in the following terms:

“[34] Honeysett is authority for the proposition that for the purpose of s.389(2)(b) it is sufficient if the Commission identifies a suitable job or position to which the dismissed employee could be redeployed. The Commission must then determine whether such a redeployment was reasonable in all the circumstances. We note that given the factual context the Full Bench in Honeysett did not need to consider whether s.389(2) may be satisfied if the dismissed employee could be redeployed to perform other work within the employer’s enterprise (or that of an associated entity.) Given its particular factual circumstances Honeysett is not authority for the proposition that it is always necessary to identify a particular job or position to which the dismissed employee could have been redeployed.

[35] As we have mentioned, the use of the past tense in the expression ‘would have been reasonable in all the circumstances for the person to be redeployed ...’ in section 389 (2)(a) directs attention to the circumstances which pertained when the person was dismissed. As noted in Honeysett, [T]’he exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances’. The question is whether redeployment within the employer’s enterprise or an associated entity would have been reasonable at the time of dismissal. In answering that question the Full Bench in Honeysett observed that 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”.”

[53] I have considered whether, on the balance of probabilities, there was a job or a position, or other work within Construction Glazing or any of the other companies within the Chevron Group to which it would have been reasonable in all the circumstances to redeploy Mr Cliffe.

[54] Mr Cliffe’s circumstances at the time the redundancy decision was made are relevant. He was not working as Construction Glazing was not able to provide suitable light duties for him. He had surgery on his shoulder on 24 June 2014 and, at least until 1 October 2014 29 was unfit for work. This means that, at the time when redeployment opportunities were relevant, Mr Cliffe was substantially unable to work. The redeployment issue for Construction Glazing was therefore complicated on the basis that it had to consider not only Mr Cliffe’s skills, but his physical wellbeing and incapacity to work.

[55] Secondly, I note that at the time of the termination of Mr Cliffe’s employment he had lost his driver’s licence. While Mr Cliffe had not advised Construction Glazing of this, I am satisfied that this licence loss had the capacity to affect certain of the work which he could otherwise be expected to undertake.

[56] The evidence of Mr Kovacic with respect to redeployment was that:

“44. In the course of the redundancies, redeployment options were considered.

45. The respondent did not have any redeployment opportunities, as the workforce was already being reduced beyond the applicant’s position, and there were no opportunities to place any of the other employees. Since that time there have been no new glaziers employed, nor subcontract or labour hire workers engaged by the respondent.

46. At the time of termination, we understood that the applicant would be unfit for work, then fit for restricted duties for an indeterminate point in the future.

47. The applicant’s medical restrictions were such that he was not in a position to perform any of the roles that employees perform.

48. It was expected that the recovery would take a long time. Attached to this affidavit and marked “MK18” is a copy of a medical report that indicates the applicant’s recovery is expected to be at the slower end of the spectrum.

49. Since the surgery, Construction Glazing had received a report for the surgeon. A copy of this document is contained as attachment “MK19”.

50. I am responsible for the management of the glazing operations at Mount Barker Glass. Attached and marked “MK20” is a copy of records of the use of subcontract and labour hire employees at Mount Barker Glass. Each of the workers utilised by Mount Barker Glass were glaziers. The applicant was not able to perform the role of a glazier and was not for the foreseeable future able to perform such duties.

51. In relation to the other positions, even if the applicant did not have restrictions, I did not consider the applicant appropriate for work in factory type environments because in my experience, site glaziers find it difficult to adjust to the regimented environment of a factory, which is different to the site environment and has led to industrial issues in the past. Taking into account the applicant’s attitude towards his light duties in the respondent’s workshop, I believe that the applicant would not be able to perform to a satisfactory standard in the high pressure and regimented factory environment.” 30

[57] Mr Kovacic’s oral evidence confirmed the steps he took before issuing the 27 May 2014 notice to explore redeployment opportunities. These included contact with other personnel within the Chevron Group, which confirmed that there were no light or full duty positions available. 31 The evidence of Messrs Rowswell, Haddington, and Millar was consistent, and established that at the time of the termination of Mr Cliffe’s employment, there was no job or position within those other corporate entities part of the Chevron Group, to which it would have been reasonable in all the circumstances, to redeploy Mr Cliffe. In that respect, I have taken into account the nature of the duties to which those witnesses referred and the extent to which, at the time of the termination of Mr Cliffe’s employment he was physically unable to undertake any of those tasks. To the extent that circumstances relating to subsequent job opportunities may have changed after the termination of Mr Cliffe’s employment, this does not impact on my consideration of s.389(2). Further, whilst it was open to Construction Glazing to keep Mr Cliffe employed until he was cleared to return to some type of duties, and such a decision may have made sound commercial sense, its decision to make him redundant meant that his inability to work at that time became significant.

[58] Accordingly, I am satisfied that the requirements of s.389(2) have been met in these circumstances.

[59] As a result of these findings I have concluded that the termination of Mr Cliffe’s employment occurred such that it was a case of genuine redundancy. As a result of s.385, that dismissal cannot be unfair and the application must be dismissed accordingly.

[60] Notwithstanding the decision I have reached in this respect, it is appropriate to note that, even if I had concluded that the merits of the application should be considered, the evidence before me would have resulted in the dismissal of Mr Cliffe’s application. Mr Cliffe challenges the correctness of the Full Bench decision in UES Int’l. 32 I consider that the UES decision means the reasons for Mr Cliffe’s selection for redundancy are not open for review by the FWC. Furthermore, the evidence is overwhelmingly indicative of the business downturn forming the basis for the termination decision.

[61] Irrespective of whether there was a valid reason for the termination of Mr Cliffe’s employment, Mr Cliffe asserts that he was not notified of the reason for his dismissal. This is simply not supported by the evidence.

[62] There are no issues of poor performance associated with the termination decision. The size of the Construction Glazing business does not mitigate in favour of a finding of unfairness. The downturn in work confronting Construction Glazing is a significant other factor which must be taken into account and as I have concluded that this constituted the reason for the termination of Mr Cliffe’s employment it is another factor mitigating against unfairness. As Mr Cliffe is continuing to receive workers compensation payments, I am not satisfied that his circumstances are such that his workers compensation standing should override all of the other elements of s.387.

[63] An order (PR560951) consistent with my conclusions about s.389 will be issued.

Appearances:

M Ats counsel for the Applicant.

T Earls counsel for the Respondent.

Hearing details:

2014.

Adelaide:

October 27

December 10.

 1   Exhibit R6 Attachment MK4

 2   Exhibit A3, para 9

 3   Exhibit A3, para 16

 4 (1959) 101 CLR 298

 5   Exhibit R2, paras 8 - 14

 6   See Mr Kovacic's evidence Transcript 3.00pm and 3.19pm, 27 October 2014

 7   Exhibit R6, paran 13

 8   Transcript the evidence of Mr Kovacic, 2.20pm, 27 October 2014

 9   Transcript the evidence of Mr Kovacic, 3.13pm, 27 October 2014

 10   Transcript the evidence of Mr Kovacic, 2.05pm, 27 October 2014

 11   Exhibit R6, para 17

 12   Transcript, 10.55am, 10 December 2014

 13   [2012] FWAFB 5241

 14   See UES, para [27]

 15   Exhibit R2, paras 52 - 56

 16   Exhibit R6, paras 18 - 20

 17   Exhibit R6, paras 24 - 26

 18   Exhibit A3, paras 16 - 18

 19   Exhibit A3, para 19

 20   Exhibit R6, MK11

 21   Exhibit R6, MK11

 22   Exhibit R6, para 41

 23   Exhibit R6, MK15

 24   [2014] FWCFB 2143, paras [48] -[62]

 25   [2014] FWCFB 2143, paras [48] - [74]

 26   [2010] FWAFB 7578

 27   [2010] FWAFB 7578, paras [34] and [35]

 28   [2014] FWCFB 714

 29   Exhibit A4, para 107

 30   Exhibit R6, paras 44 - 51

 31   Transcript, 11.05am, 27 October 2014

 32   [2012] FWAFB 5241

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