Melissa Peart v Allianz Australia Services Pty Ltd

[2011] FWA 1267

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Melissa Peart
v
Allianz Australia Services Pty Ltd
(C2010/4735)

Insurance industry
COMMISSIONER ROBERTS	SYDNEY, 29 JULY 2011

Redundancy and redeployment.

[1] This decision concerns an application made by Ms Peart pursuant to s.739 of the Fair Work Act 2009 (the Act) for Fair Work Australia (FWA) to deal with a dispute between her and Allianz Australia Services Pty Ltd (Allianz or the Company). The dispute arises from the dispute resolution procedure of the Allianz Australia Business Partnership Agreement 2010 1(the BPA or the Agreement).

[2] The Agreement contains a Dispute Resolution Procedure. The Agreement sets out a number of steps to be followed when a dispute arises as to matters covered by the BPA. It relevantly provides at subclauses 9(b)(iv), (c) and (d):

“(b)(iv) If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the matter to Fair Work Australia.

(c) Fair Work Australia will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and

(d) if Fair Work Australia is unable to resolve the dispute at the first stage, Fair Work Australia may then:

(i) arbitrate the dispute; and

(ii) make a determination that is binding on the parties.

Note: If Fair Work Australia arbitrates the dispute, it may also use the powers that are available to it under the Act.

A decision that Fair Work Australia makes when arbitration a dispute is a decision for the purpose of Div 3 of Part 5.1 of the Act. Therefore, an appeal may be made against the decision.”

[3] Unsuccessful conciliation was conducted on 13 September 2010. The application was then heard in Sydney on 6, 7 and 21 December 2010. Ms Peart was represented by Mr T Saunders of Counsel and Allianz by Mr S Mellos, solicitor of Baker & McKenzie.

[4] Ms Peart gave sworn evidence on her own behalf. Mr P Vasili (Compensation & Benefits Manager), Ms S O’Donnell (Employee Relations Consultant) and Mr J Poole (Chief General Manager Broker & Agency Sales) gave sworn evidence for Allianz.

Background

[5] Ms Peart commenced employment with HIH Insurance in 1997 as a Customer Service Officer. In 2001, Allianz acquired the HIH business. Ms Peart continued working with Allianz after it acquired HIH and remained employed by the Company until August 2010. She was employed in a number of roles including Strata Underwriter, Internal Business Development Manager, Business Development Manager and as a Sales and Marketing Co-ordinator during the period 2001 and 2008. From 2008 to the end of her employment, she was employed as a National Customer Development Manager (also referred to in this decision as the Old Role). That role became redundant in August 2010 and Ms Peart was offered redeployment to what Allianz argues is the comparable position of Underwriter, Schemes & Facilities (also referred to in this decision as the New Role). Allianz then argues that the failure of Ms Peart to take up the offered ‘Comparable Position’ led to an end to the employment relationship not involving the payment of redundancy benefits.

[6] In her application, Ms Peart characterised the dispute in the following terms:

“1. The Applicant’s position of National Customer Development Manager was declared redundant effective immediately by her employer, Allianz Australia Services Pty Limited (‘Allianz’) in writing on 5 August 2010.

2. Allianz advised the Applicant that Allianz had found a comparable role [Underwriter, Schemes and Facilities] and was given 24 hours within to accept the role [sic] or it would be assumed that she had resigned.

3. The Applicant in the absence of any information concerning the new role declined to accept the role immediately and sought further information regarding the new role. No job description or any comparison between the current (redundant) role and the offered role was provided.

4. The Applicant sought to be provided information by Allianz to demonstrate that the new role compared with the redundant role and after an opportunity to review the material to meet with the employer. The information subsequently provided to the Applicant led the Applicant to conclude that the role offered was not comparable. The Applicant conveyed this view in both a meeting with Allianz and in writing. Allianz rejected the Applicant’s contention and maintained that the role was comparable. Allianz asserted that unless the Applicant accepted the new role by 16 August 2010 she would be regarded as having resigned from her employment.

5. On 13 August 2010 the Applicant advised Allianz in writing that she declined the new role which was not comparable to her current (redundant) position.

6. On 16 August 2010 Allianz gave written notice terminating her employment on the grounds of redundancy. However, Allianz maintained that the Applicant was not entitled to any severance payment as provided for in the [Agreement].”

[7] Ms Peart seeks the following relief:

“1. An order that Allianz comply with the provisions of the [Agreement] in respect of the redundancy of the Applicant’s position and subsequent termination of her employment, and in particular clause 10.2.5 Severance Payment.

2. An order that Allianz pay to the Applicant the following amounts in accordance with clause 10.2.5 of the [Agreement]:

(a) four weeks’ pay in lieu of notice (in addition to payments of notice already made);

(b) a payment equivalent to three weeks’ salary for each completed year of service by the Applicant with Allianz and a pro rata payment for each completed month of service in the Applicant’s final part year of service;

(d) payment of a reasonable sum for the provision of outplacement services.

3. In the alternative to paragraphs 1 and 2, the Applicant seeks binding determinations that, in the events which have transpired:

(a) the Applicant’s position of National Customer Development Manager was made redundant by Allianz on or about 5 August 2010;

(b) the alternative position offered to the Applicant by Allianz (namely, the role of Underwriter, Scheme and Facilities) was a ‘suitable alternative’ position within the meaning of the [Agreement];

(c) the alternative position offered to the Applicant by Allianz (namely, the role of Underwriter, Scheme and Facilities) was not a ‘comparable’ position within the meaning of the [Agreement];

(d) the Applicant is entitled to the benefits stipulated in clause 10.2.5 of the [Agreement]; and

(e) Allianz must pay to the Applicant the following amounts in accordance with clause 10.2.5 of the [Agreement]:

(i) four weeks’ pay in lieu of notice (in addition to payments of notice already made);

(ii) a payment equivalent to three weeks’ salary for each completed year of service by the Applicant with Allianz and a pro rata payment for each completed month of service in the Applicant’s final part year of service;

(iii) payment of pro rata long service leave; and

(iv) payment of a reasonable sum of the provision of outplacement services.”

Relevant provisions in the Agreement

[8] The Agreement contains detailed provisions concerning redeployment and redundancy. It relevantly provides at subclause 10.2:

“10.2 Redeployment and redundancy

The provisions of this clause apply to all Allianz Australia employees except casuals and temporary employees. This clause is to be read in conjunction with the provisions concerning termination of employment contained in the Act.

10.2.1 Retrenchment as a last resort

Retrenchment will only occur after all reasonable alternatives for continuing employment have been fully explored. Allianz Australia will make every effort to avoid retrenchment by retaining and redeploying employees, and giving first consideration to filling vacancies with suitably skilled employees whose roles may be redundant.

10.2.2 Notice

At the earliest opportunity and where possible, at least one (1) week prior to any announcement of retrenchment involving groups of a minimum of ten (10) employees at any one time, Allianz Australia will inform the Finance Sector Union of likely retrenchments.

10.2.3 Redeployment

Allianz Australia will endeavour to redeploy employees whose positions have been made redundant, in the first instance, into a ‘comparable’ position, or if such a position is not available, into a ‘suitable alternative’ position.

The following procedures shall apply when redeploying employees:

(a) The redeployment position shall not entail a change in duties significant enough to be unreasonable given the employee’s skills for ability, but also having regard to the training opportunities available to the employee.

(b) The redeployment position shall be at the same location or at another location that is within reasonable commuting distance (i.e. within the same metropolitan area as the employee’s substantive position). Allianz Australia will also consider other factors including the employee’s duties and responsibilities, family and personal commitments, and historical use of private and public transport.

(c) An employee whose position has been identified as redundant will not be entitled to any redundancy payment, nor will they be eligible for any payment in lieu of notice, if they decline to take up any Allianz Australia offer of a ‘comparable’ position.

(d) For the avoidance of doubt, in the event that the whole or part of the business of Allianz Australia is sold, outsourced or otherwise transmitted or assigned and the employee is offered and does not accept a comparable position with the transmittee, assignee or successor, the employee will not be entitled to a severance payment or payment in lieu of notice.

(e) By declining the offer of redeployment to a ‘comparable’ position an employee will be deemed as having terminated their employment with Allianz Australia.

10.2.4 Redundancy

In cases where a position becomes redundant, Allianz Australia will make all reasonable efforts to redeploy the employee concerned to a ‘comparable’ position elsewhere in Allianz Australia. In the event that there is not a ‘comparable’ position available, Allianz Australia management may offer the option of continued employment in a ‘suitable alternative’ position on the following basis:

(a) The offer is in lieu of retrenchment with the objective of continuing employment.

(b) The offer is to be made in writing.

(c) Where an employee accepts a ‘suitable alternative’ position in lieu of retrenchment, the employees current salary level will be maintained until such time as it is overtaken by the salary level of the position to which they have been redeployed.

(d) Where an employee is offered a ‘suitable alternative’ position, the employee will have a period of up to two (2) months to elect whether to accept the ‘suitable alternative’ position or be paid redundancy benefits. Should either the employee or Allianz Australia find during that period that the employment is unsuitable, the employee’s service may be terminated without loss of entitlement to retrenchment payments calculated to the date the service actually ends.

(e) Clause (d) above does not affect the ability of either Allianz Australia or the employee to elect prior to the conclusion of the trial period that that alternative position is unsuitable.

(f) Where employment in a ‘suitable alternative’ position is offered but not accepted by an employee, the employee’s rights in respect of retrenchment will be preserved.

10.2.5 Severance payment

Upon termination through retrenchment, an employee will be entitled to:

(a) Eight (8) weeks notice or payment in lieu thereof.

(b) Three (3) weeks salary for each completed year of service and a pro rata payment for each completed month of service in the final part year of service.

(c) The minimum entitlement (including both notice and severance) is eleven (11) weeks salary and the maximum entitlement (including both notice and severance) is seventy five (75) weeks salary.

(d) Payment of pro-rata long service leave, provide that the employee has six (6) years or more continuous service with Allianz Australia.

(e) Payments associated with redundancy will be paid on a pro-rata basis for periods of full-time and part-time employment.

(f) Outplacement services offered by Allianz Australia.”

[9] Subclause 2.3 of the Agreement provides relevant definitions:

“(g) ‘Comparable Position’ means a position that is of equal or greater work value to the employee’s current position. This definition should be read in conjunction with ‘Redeployment and Redundancy’ in this Agreement.

(t) ‘Suitable Alternative Position’ means a position that is of lower work value than the employee’s normal position that has been formally offered to an employee in lieu of retrenchment. This definition should be read in conjunction with clause 10.2 ‘Redeployment and Redundancy’ in this Agreement.

(y) ‘Work Value’ means the relative size of a position in terms of role evaluation criteria.”

[10] Allianz also has an internal Redundancy Policy which provides the following definitions of ‘Suitable Alternative’ and ‘Comparable Position’:

“Suitable Alternative:

A position of lower work value than the employee’s current position. In determining if a position is of lower work value, consideration is given to the following:

• Skills, abilities and competencies required;

• Location of the position;

• The position’s reporting line;

• Criticality of outputs;

• Decision-making authority;

• Remuneration level; and

• Change in employment status (e.g. full-time to part-time).

Comparable Position:

A position that is of equal or greater work value as the employee’s current position, provided that:

• It does not entail a change in duties significant enough to be unreasonable given the employee’s skills and ability, but also having regard to the training opportunities available to the employee; and

• Is at the same location or at another location that is within reasonable commuting distance (i.e. within the same metropolitan area as the employee’s current position).”

Evidence

Ms Peart

[11] Ms Peart gave sworn evidence and submitted two witness statements. 2 In her primary witness statement, Ms Peart:

Detailed her employment history.

Said that: “Throughout my 13 years of employment with the Respondent, I always worked in ‘building relationship’ style roles. In light of my skills and experience in these ‘building relationship’ type roles, I feel as though I have been able to excel in them. I was able to use my skills and experience in this area to interact effectively, and build relationships, with people in various departments/divisions within the Respondent’s organisation.”

Said that she attended a meeting with Mr Hatzimichailidis (Broker and Agency National Operations Manager) and Ms O’Donnell at which Mr Hatzimichailidis told her that her then position was being made redundant immediately.

Said: “I was told that a comparable role had been found for me and was then handed a letter confirming that my role had been made redundant and a letter of offer for the role of Underwriter - Schemes & Facilities.”

Said: “I immediately told [Mr Hatzimichailidis] and [Ms O’Donnell] that I was aware of this role and that the proposed role was not a comparable role.”

Said that she told Mr Hatzimichailidis and Ms O’Donnell that she would not accept the New Role and was told that if she did not accept it she would be considered to have resigned. She was also told that there was no other role for her to take on.

Said that she was left in a ‘distressed condition’ by the meeting on 5 August 2010.

Said that on 6 August 2010 she received a copy of the Job Description for the New Role.

Said that she sent Allianz an email on 10 August 2010 “in which I communicated my intention not to accept the proposed role and informed him that I was happy to meet with him and human resources upon his return. I reinforced the reason for me not accepting the role was because I did not believe it was a comparable role.”

Said that she attended the meeting on 12 August 2010 where she informed the Company that the job descriptions for her Old Role and the New Role show “that there are real disparities in core competencies and job profiles for the two roles”.

Said that Allianz had maintained at the 12 August 2010 meeting that the “new role actually has a higher job grade than your current role. You will also have a good internal profile in the new role.” Allianz repeated that failure to take on the New Role would be treated as a resignation.

Said that she replied: “I will not be accepting the role because it is not comparable. I am therefore entitled to redundancy. I will be taking the necessary steps to take this matter further and will advise accordingly.”

She confirmed her verbal statement by email on 13 August 2010, again asserting her entitlement “to severance payment as per the redundancy policy.”

Said that on 16 August 2010 she attended a further meeting with the Company at which her employment was terminated.

[12] Ms Peart’s primary witness statement went on to set out her view as to why the two roles are not comparable. She set out her reasons in some detail and these are summarised below:

Lower level of seniority. The New Role “is at one level of seniority below the role of National Customer Development Manager.”

Lower skills, abilities and competencies. All nine competencies for the New Role are classified as Core Competency “whereas in my role of National Customer Development Manager, all bar one of my competencies for the role were classified as Leadership Level”. The new role “is basically analysing information. In comparison, my role of National Customer Development Manager involved significant business critical outputs ...”. “The extent of knowledge and experience required to undertake the role of Underwriter - Schemes & Facilities was far less than my role of National Customer Development Manager”. Her old role “required me to have extensive interaction on a daily basis with various areas within the Respondent’s Broker and Agency Division as well as across other divisions within Allianz and external brokers/agents.”

Lower decision-making authority. The New Role “involved a lower level of decision-making authority than my role as National Customer Development Manager”. In the Old Role she “had the authority to make all necessary changes or improvements to the systems I managed”. “[I]n contrast, the role of Underwriter - Schemes & Facilities involved analysing information and providing that information to the Commercial Underwriting Manager, who had the authority to make decisions on the basis of that information and implement any measures or changes.”

Lower criticality of outputs. In her Old Role, she “was the contact point for the whole Division and I had responsibility for managing the quoting platform called Workbench and the Salesforce.com system, solving problems that arose with those systems and coming up with innovative ways to further improve the systems.” In the New Role, “I would have only worked in the Commercial space for Australia. The criticality of outputs lies with the National Commercial Underwriting manager. I would have been analysing the performance of schemes and making recommendations, however the decision to implement would be made by the National Commercial Underwriting manager. In essence I would be his assistant in relation to schemes for the Commercial area.”

Significant change in duties. “Moving from the role of National Customer Development Manager to the proposed role of Underwriter - Schemes & Facilities would, I believe, have entailed a change in duties significant enough to be unreasonable. The two roles involve completely different duties. One role (the proposed new role) involved analysing information, whereas my existing role involved managing important systems in the Respondent’s business and building strong relationships with other employees of the Respondent and external contracts. Throughout my 13 years at the Respondent I had always worked in ‘building relationship’ style roles. In those roles I built up considerable skills, experience and expertise in building relationships with internal and external contacts. I believe that my skills in those areas would have diminished over time if I worked in the role of Underwriter - Schemes & Facilities. In addition, the skills, experience and knowledge that I had built up in relation to the Respondent’s Workbench system and Salesforce.com system, both of which changed regularly, would have been diminished over time if I worked in the role of Underwriter - Schemes & Facilities. Finally, in the role of Underwriter - Schemes & Facilities I would not have had contact with the many areas of the Respondent’s business I dealt with in the role of National Customer Development Manager and I believe that the much lower profile of the role of Underwriter - Schemes & Facilities would have had a negative impact on my future employment prospects, particularly in circumstances where my career to date has been focused on relationship building roles and I wish to continue working in that area in order to utilise the skills, experience and expertise I have developed in that area.”

[13] Ms Peart went on to say: “If my position had not been made redundant, I would definitely have been happy to continue my role with the Respondent as the National Customer Development Manager or any other comparable role.”

[14] Ms Peart’s second witness statement largely took the form of a reply to the witness statement of Mr Poole. In that statement, Ms Peart said that the job description for her Old Role demonstrated that the role was not largely an administrative, coordination and/or reporting position. The job description required her to achieve ‘leadership’ competency levels for eight of the nine competencies in that role. Ms Peart went on to say, in summary, that:

In relation to Mr Poole’s evidence that the New Role provides a greater opportunity for advancement: “however I do not have any desire to pursue a career in underwriting and product management. It is for this reason that I was working in the customer/business development role within the operations team for the Respondent. I had been working in customer/business development roles for 9 years (since 2001) for the Respondent before my position was made redundant. That was a deliberate strategy on my part to focus my career in that area. I have not worked in an underwriting role since 2001. I intend to pursue my career in customer/business development roles, which is where I believe I have the best future, in light of my skills and experience.”

She disputed the assertion that the Old Role required little critical output.

She disagreed that there was little decision making authority in the Old Role compared with the New Role. “In the proposed role my direct manager would have been Mr Rob Price, who is two levels below Mr Poole in the Respondent’s hierarchy of managers.”

She disagreed that the New Role had greater visibility than the Old Role.

She disagreed that the Old Role had no measurable direct impact on business. “There are many aspects of the Respondent’s business that have no direct impact on profit, however they are important to the Respondent’s business and therefore have a direct impact on the Respondent’s business. One example is Human Resources. Another example was my role of National Customer Development Manager.”

The Old Role involved the application of problem solving skills and negotiations with key stakeholders.

Her Old Role involved a “significant amount of analysis, insight or responsibilities”.

There was no discussion with her about any salary opportunities or incentive schemes for the New Role.

“That role was offered to me at precisely the same remuneration as I was receiving in my current role at the time, which did not include any incentive payments.”

Her Old Role involved major projects contrary to the assertion of Mr Poole.

The New Role would have limited her interaction with managers: “whereas my existing role involved dealing with Managers across the whole Broker and Agency division as well as across Allianz in Australia and New Zealand.”

[15] I have also paid regard to limited material in Ms Peart’s second witness statement relating to the evidence of Ms O’Donnell and Mr Vasili.

[16] In cross-examination, Ms Peart:

Agreed that on 5 August 2010 she rejected the New Role and went on to say that she did so because she had knowledge of the New Role and its place in Allianze. 3

Was asked: “What I'm suggesting to you is that you did not have enough information or sufficient detail to make an assessment of that role at that time?” and replied: “I knew the role was underwriting driven, I know my role is not underwriting driven. To me that's why I deemed it to be not a comparable role and that's why I made that statement.” 4

Agreed that the aim of the Allianz redeployment policy is “to try and keep people in employment rather than retrench them.” 5

Was asked: “It's the case, isn't it, that you have no desire in pursuing a career in underwriting and product management?” and replied: “Correct.” 6

Was asked: “So I'm suggesting to you that from the very outset you weren't interested in the details about what Allianz called the comparable role because you had made up your mind?” and replied: “I had made up my mind at that point in time that I did not want that role because it was in underwriting. But I then - because I didn't have all the information with me after the meeting I then sought further information.” 7

Agreed that she places a great deal of emphasis upon “your desires and what you want to achieve.” 8

Said that when she read the job description for the New Role, she believed the duties were completely different to those of her Old Role. 9

Said that she did not disagree with anything about the JobLink assessment as set out in Mr Vasili’s statement. 10

Denied that she was only ‘going through the hoops’ when she requested further information about the New Role and that she never intended to seriously consider taking it. 11

Said that she was satisfied that the criteria in the Allianz redundancy policy were the relevant criteria to compare the two roles and on that basis, they were not comparable. 12

Agreed that she possesses “the requisite abilities and skills to do the work associated with the [New] role which was offered ...” 13

Disagreed that a large part of the Old Role was administrative in nature. 14

Agreed that she knew from 5 August 2010 that the salary for the New Role would not be less than that of the Old Role. 15

Agreed that, in the Old Role, nobody reported to her. 16

Agreed that an organisational chart relating to her position 17 was accurate concerning lines of reporting.18

Agreed that one of the criteria in deciding comparability was remuneration level. 19

Agreed that a person holding the New Role would make a significant contribution to Allianz’s profit. 20

Denied that she would not have accepted the New Role even if it was, in her view, comparable. 21

Said that she made a decision in 2001 that she did not wish to work in underwriting as underwriting “was not where my career is going”. 22

Was asked: “So even if those matters were of greater value which we have gone through and discussed: criticality, visibility, management decision-making and things of that nature, even if they were greater in the underwriter role you were going to reject the role?” and replied: “I didn't want to be in underwriting.” 23

[17] In re-examination, Ms Peart:

Said that the job description for the Old Role accurately reflected what she did in that role. 24

Said that the duties and responsibilities set out in her second witness statement were what she actually performed. 25

Ms O’Donnell

[18] Ms O’Donnell gave sworn evidence and submitted a witness statement 26. It was Ms O’Donnell’s statement that her role required her “to participate in discussions with employees and their managers in circumstances of redundancy and redeployment”. She went on to say that she had participated in a meeting with Ms Peart on 5 August 2010, the purpose of which was to advise the Applicant that it had been decided to make her Old Role redundant and that Allianz had identified the New Role as a comparable redeployment position.

[19] “I also recall Ms Peart saying during the meeting, in respect of the position of National Underwriter - Schemes & Facilities which had been offered to her: Melissa: ‘I know I could do the job, but I do not want to do it.’”

[20] In cross-examination, Ms O’Donnell:

Said that Allianz’s human resources policies, including the redundancy policy, are on the company intranet. 27

Was asked: “Is your understanding that the reason Ms Peart was offered that role, or one reason she was offered that role at the lower salary than was being paid to Mr [B] [the previous holder of the New Role] was to save Allianz money?” and replied: “No, that was not the reason why.” 28

Said that she was unaware in August 2010 as to how the Company perform evaluations of roles to discover if they were comparable. 29

Agreed that no comparison of the two roles using JobLink was undertaken until 10 August 2010. 30

Said that she was familiar with the enterprise provisions concerning suitable alternative positions and comparable positions as such matters affect possible redundancy payments and outplacement services. 31

[21] In re-examination, Ms O’Donnell was asked: “Can I ask you how many redundancies or redeployment issues had you been involved with Allianz during that period, prior to the Ms Peart situation?” and replied: “None.” 32

Mr Poole

[22] Mr Poole gave sworn evidence and submitted a witness statement 33. He joined Allianz in 2000 and since August 2009 has held the position of Chief General Manager Broker & Agency Sales. He went on to say, in summary:

“Both the positions of National Customer Development Manager (being the previous position held by Ms Peart) and National Underwriter - Schemes & Facilities (being the new position offered to Ms Peart) fall within the Division.”

That he is aware of the position descriptions of both roles and has a “general awareness of the skills, abilities and competencies required to perform both of these roles.”

That: “In seeking to redeploy an employee whose position has been made redundant I understand that the Agreement applies so as to require Allianz at first instance to endeavour to redeploy employees into a comparable position.”

That: “I understand that a comparable position is a position that is of equal or greater work value to the employee’s concerned current position. In terms of Ms Peart’s situation, this would mean looking to redeploy Ms Peart into a position that was of equal or greater work value to the role of National Customer Development Manager.”

That: “I understand that the comparable position is not to entail a change in duties significant enough to be unreasonable given the employee’s skills and ability, but also having regard to the training opportunities available to the employee.”

[23] Mr Poole went on to say that in considering whether the New Role was a comparable role, the following matters were taken into consideration: These can be summarised as:

The Old Role was largely an administrative and coordination position whereas the New Role was more senior and had a greater impact on business.

The New Role provided greater opportunity for advancement.

The New Role provided more opportunities for critical output.

The New Role had more decision making authority.

The New Role had a direct impact on Allianz’s profits whereas the Old Role had no measurable direct impact.

The New Role required close liaison regarding pricing, profitability and scheme management activities. The Old Role had no such impact.

The New Role provided opportunities to develop ideas and solutions whereas the Old Role did not.

The Old Role was predominately a reporting role but the New Role required more independent thought, evaluation and judgment to be exercised.

The New Role required analysis and problem assessment whereas the Old Role did not.

[24] Ms Peart was assessed as being suitable for the New Role due to her underwriting experience, distribution experience, systems and process knowledge and familiarity with Allianz’s structure.

[25] Mr Poole went on to say that the New Role offered greater salary opportunities, a greater opportunity for advancement and far greater visibility within the organisation due to its critical nature.

[26] Mr Poole went on to reply to contentions put forward by Ms Peart. In summary, he said:

• The New Role does not have a lower level of seniority and Ms Peart’s contention to the contrary does not take account of the fact that “the reporting lines bear no resemblance to the level of seniority within a role.”

• That: “‘Seniority’ within the Allianz business is identified by a range of measures not just reporting line. These include (but are not limited to):

(a) experience;

(b) expertise;

(d) industry knowledge.”

• That: “Moreover, ‘seniority’ within the business is generally reflected in salary level. For example, Mr Price’s position of National Underwriting Manager, which was at the same hierarchical level as Ms Peart’s former position of National Customer Development Manager is considered more senior as it has greater impact than the position of National Customer Development Manager notwithstanding that these positions on a direct reporting line analysis seem comparable.”

• That the New Role had a base potential salary of up to $140,000 plus 10% Senior Management Incentive.

• That levels of seniority are reflected in salary levels.

• That Ms Peart is in error in relation to the alleged lower skills, abilities and competencies of the New Role. The Old Role “was predominantly an administrative and coordination function ...”

• That the New Role delivers an underwriting profit of $6 million to $9 million and a similar amount in investment earnings. The Old Role had no such impact. “The effect of this is that a person in the [New Role] required higher skills, abilities and competencies to competently and adequately discharges duties given the impact of the role on the business.”

• That the New Role “requires contact with all of Broker & Agency Commercial’s state based management including State Managers and the State Underwriting Managers. In addition, close liaison is required with the Product Management and Research function regarding pricing, profitability and scheme management activity. The position of [the Old Role] had no such exposure nor did it require these abilities or competencies.”

• In relation to the assertion that the New Role had lower decision-making authority, that the Old Role: “had little decision making authority other than the normal self direction of an individual’s work effort.” The new role “requires development of ideas and solutions with State Managers or State Underwriting Managers within the business. The position also requires participation in decisions as to pricing, profitability and scheme management activity and management of the renewal review process for schemes & facilities. It also requires an application of problem resolution skills in negotiations and requires identification of underlying issues or problems which arise in the role, and for preventive strategies to be put in place.”

• That the Old Role had very little in the way of critical outputs and that this “was one of the factors taken into consideration when we decided to make the role redundant.”

• “I do not understand what Ms Peart means when she deposes to managing the quoting platform (Workbench) and Salesforce.com ... The information technology is managed by the Allianz Information Technology department and as far as I am aware, there have been no major projects on either platform for the last 12 months. I know this because such activity would require specific approval by me.”

• “I am not aware of any strategy documentation produced by Ms Peart for either of the Workbench or the Salesforce.com systems.”

• That the New Role “is responsible for a critical business function requiring criticality of outputs and given the important and direct contribution the role has to the Broker & Agency and business profit results.”

• That the changes in duties involved in the New Role when compared with the Old Role were not unreasonable in the light of Ms Peart’s experience in previous positions held within Allianz. She would have been able to take on the New Role “without undue difficulty”.

• That the New Role would have had a positive impact on Ms Peart’s future employment prospects.

• That the New Role would have utilised Ms Peart’s relationship building skills and provided her with a management interface with the Division’s senior management team.

• That the New Role, being less administrative in nature than her Old Role, “would have required Ms Peart to utilise her skills, experience and expertise in building relationships more than she would otherwise have in her former role.”

[27] That both the old and new roles have similarities in the duties to be performed. Mr Poole expanded on this point in the following terms:

“In terms of Customer duties, the [Old Role] required customer relationship, management strategy and Net Promoter Score broker survey. The [new role] required customer service, development of client relationships and negotiation. In terms of the Customer service focus in the [New Role], the individual in the role is required to take personal responsibility for action. In respect of the development of client relationships, the individual in the [New Role] is required to develop ideas and solutions with state managers or state underwriting managers. In terms of Sustainable Improvement, the [Old Role] and the [New Role] required initiative. Both roles require individuals to apply knowledge to identify opportunities for improvement. Individuals are required to solve problems and take advantage of opportunities without being asked. Implementation of own initiatives is required.”

[28] In cross-examination, Mr Poole:

Did not agree with the proposition that the JobLink system “is the only mechanism by which it is possible to determine whether the position offered to an employee at Allianz is of equal or greater value or relative size to the position being made redundant.” 34

Said that the offering of the New Role to Ms Peart was not done lightly, in the light of the failure of the previous occupant of that position being unsuccessful in it. 35

Said that he considered the proposed New Role to be: “a step up, like a real opportunity to show your capability, advance in the company.” 36

Agreed that the first time Ms Peart was told that JobLink had been used to compare the two roles was 10 August 2010. 37

Said that he was unaware as to what criteria are considered in using the JobLink system. 38

Agreed that Allianz’s redundancy policy is available on the company intranet. 39

Said that he was aware of the redundancy policy but did not read it or apply it in his consideration of Ms Peart being offered the New Role.

Agreed that the previous occupant of the Old Role was paid $140,000 per annum and also had the opportunity to earn a 10% incentive payment. 40

Agreed that Ms Peart was offered $92,000 per annum with no mention of an incentive payment and that the salary reflected her salary in the Old Role. 41

Said that any financial saving in Ms Peart taking up the New Role did not figure in his consideration. 42

Was asked: “You didn't tell Ms Peart at any time that she had the opportunity to potentially earn or participate in an incentive program in the new role, did you?” and replied: “Look, with respect I never had the opportunity. By the time I met with Melissa and her husband and Michelle we had received letters saying I don't want the role, I'm not interested in the role, you've made me redundant, I want to talk to you about all the reasons why it's not a comparable role and I'm not interested in underwriting.” 43

Said that the New Role had a potential base salary of up to $140,000 per annum. 44

Was asked, in relation to the two roles: “So you understand the distinction between the two career paths, don’t you?” and replied: “Yes, I do but those career paths cross over on a regular basis, so in the course of this year I have had four sales people apply for and be accepted into underwriting roles and it's quite likely that after performing the underwriting role where they will have significant customer contact and customer development, there is a term that Melissa would be aware of called market facing, the majority of the underwriting roles including the schemes and facilities one is what's called a market facing role. We expect those people to be out with brokers, we expect them to be developing business and it is not uncommon for people from the underwriting line to step into a pure sales role and people from the sales line to step into underwriting roles, it happens all the time in the company.” 45

Agreed that he did not have regard to Ms Peart’s preferred career path. 46

Was asked: “You just think that the employee's desire about where they want their career to go is irrelevant for that question?” and replied: “No, but there was nothing stopping Melissa taking that role and then applying for another role back in the sales stream if she wanted to.” 47

Agreed that job descriptions were part of the process of comparing one role against another. 48

Was asked: “You say that the duties and responsibilities set out in Ms Peart's job description for her old role that she had before the new role was offered to her accurately reflected what you wanted her to do in that role?” and replied: “Yes, what we would have liked done.” 49

Said of Ms Peart: “She's obviously capable, which was why we wanted to keep her and which is why we offered her a role upgrade when we got to it, or what in my mind was a role upgrade I should say.” 50

Said that the New Role had a direct impact on company profits, whereas the old one did not. 51

Said that Ms Peart did not carry out some parts of her Old Role job descriptions but that did not mean that she was failing in it. “I thought [Ms Peart] was a good employee, we wanted to retain her and we wanted to offer her a challenging job that had a future in it.” 52

Said that a core competency in one role might be considered leadership in another. 53

Agreed that a person requires more experience in the insurance industry to work in an underwriting role than a customer business development role. 54

Disagreed that the Old Role required greater problem solving and innovation than the New Role. 55

[29] Mr Poole went on to discuss other matters such as the organisational impact, accountability and interaction required in the old and new roles.

[30] In re-examination, Mr Poole said that: “it never crossed my mind the roles weren't comparable.” 56 He went on to say that he had done his own independent assessment separate from the later JobLink assessment.57 Mr Poole also said that he does not have any actual experience with persons regarding what applies when a position isn’t comparable but they are offered a suitable alternative position.58

Mr Vasili

[31] Mr Vasili gave sworn evidence and submitted a witness statement 59. During proceedings it was agreed that the transcript of Mr Vasili’s evidence would be marked as ‘in confidence’ and I also advised the parties that I would not be referring to his witness statement (which was also marked as confidential) in any detail (see transcript PN1708 and following). However, I have paid full regard to both the witness statement of Mr Vasili and to his oral evidence in chief and cross-examination.

[32] Mr Vasili’s evidence covered the details as to how Allianz conducts job evaluations utilising the JobLink evaluation process “created ... for the purpose of making a work value assessment to determine the relative size of a position”. In the evaluation process he compared the new and old roles and paid particular attention to the skills and competencies required by each role, the type of work to be performed in each of the roles and “the target areas of both roles”.

[33] “The JobLink results indicated to me that the New Role and the [Old] Role were comparable positions from a work value perspective.”

Correspondence between the parties

[34] On 5 August 2010, Mr Hatzimichailidis wrote to Ms Peart in the following terms 60:

“This letter is to confirm our conversation today regarding changes with your role. With regret, I advise that your role as National Customer Development Manager has been made redundant due to changed business requirements.

Following a review of positions within the organisation I am pleased to advise that a comparable position has been identified for you within the Broker & Agency Division. Further details regarding the position are attached in the ‘Letter of Offer’.

In accordance with Allianz’ Redundancy Policy, you have 24 hours to consider the comparable role and return the the [sic] completed ‘Letter of Offer’. If you choose to decline the offer of a comparable position, you will be deemed to have resigned and no redundancy payments shall apply.

I would like to take this opportunity to thank you for the contribution you have made working within the National Operations Unit, Broker & Agency and to wish you every success in the future.”

[35] Also on 5 August 2010, Mr Price (National Underwriting Manager) wrote to Ms Peart 61. The relevant sections of that letter are as follows:

“I am pleased to confirm the offer to you of the position of National Underwriter - Scheme and Facility, within our Broker & Agency division, effective Monday, 09 August 2010. Your position reports to Robert Price, Nat. Underwriting Manager and will be located at our Sydney office.

Your Total Remuneration Benefit (TRB) will continue to be $92,000.00 per annum. This amount comprises of an Employee Salary of $83,741.47, plus 9% SGC Super of $7,536.73 and Leave Loading of $721.80.

Within the next three (3) weeks, your new role responsibilities will be discussed and agreed.

It is expected that you will remain in your new position for at least six (6) months before seeking a further promotion or transfer. Other terms and conditions as agreed in your original Letter of Offer are unchanged.

If you have any questions about your new role, please contact your manager.”

[36] On 6 August 2010, Ms Peart wrote to Mr Poole 62. In that letter Ms Peart said:

“Following my meeting with [Mr Hatzimichailidis] and [Ms O’Donnell] yesterday, please be advised that based on the limited information provided to me I don’t agree the position offered to me is comparable to the role I currently perform. I am seeking clarification as to why I have been considered for this position as it appears this is a role of lesser responsibility than my current position. Furthermore, I have not yet been provided with a position description to demonstrate the new role is ‘comparable’ to the one I currently perform.

I now request a copy of the position description along with the information or methodology used to demonstrate how this job compares to my current role. Once I have had the opportunity to review this information, I’d like to formally request an appointment with yourself and HR to discuss further. It is my intention to have a witness present at this meeting.”

[37] Also on 6 August 2010, Mr Poole wrote to Ms Peart in the following terms 63:

“Thanks for addressing your concerns with me.

In formulating the changes to the National Operational team, careful consideration was given to the skills and prior experience of the individual staff affected and the level of roles offered.

The information pertinent to your request is being assembled and once I have reviewed this we will provide this to you.

I look forward to meeting with you as requested, and will arrange a time once we have provided you with the information and you have had time to digest it.

Wishing you all the best in your new role.”

[38] Again on 6 August 2010, Mr Poole wrote to Ms Peart in the following terms 64:

“Following up as promised now that I have had an opportunity to review your request and speak with HR.

I would, like to clarify a few points that I hop help address the concerns you have about the redeployment process.

I should begin by explaining that under our Business Partnership Agreement (BPA), Allianz has an obligation to seek redeployment where a position has been redundant. In doing this, we ensure that any change in duties must not be considered to be unreasonable, given the skills and ability of the employee in question. In your situation, we were able to identify a redeployment opportunity that was not only comparable, but that has an excellent fit with your skills and experience. This means that retrenchment is not an option that is available.

Assessment of comparability of roles is an important consideration in these instances, and we take this aspect of the process of ensuring you continued employment very seriously. Recently this evaluation process as subject to review by an external industrial tribunal and it was found that the process as both fair and reasonable.

In response to your specific queries, I have:

1. Attached a copy of the position description for your review. As advised, Rob Price will make himself available to discuss this role in greater detail, once he is back from leave (Monday 16 Aug).

2. Asked HR to respond to you in more detail on the process undertaken by the company to determine the comparability of the role offered to you. They will come back to you separately on this issue.

Should you have any further concerns, please direct these to either Sarah O’Donnell and Michelle Anderson in Human Resources in the first instance.

I look forward to meeting as you have suggested and I am more than comfortable if you wish to have a witness present. As a matter of courtesy, could you please advise us who this will be prior to the meeting.”

[39] On 9 August 2010, Mr Poole wrote again to Ms Peart 65 noting Ms Peart’s inability to meet on that day and informing her that Allianz was waiting for her advice as to a suitable meeting time. It went on to say:

“Given the lack of the proposed meeting today, our intention is that you will assume the new role from next Monday, 16 August at which time Rob Price will be available to meet and guide you through the induction process into the role.”

[40] On 10 August 2010, Ms Peart wrote to Mr Poole in the following the terms 66:

“Thank you for your email of last evening. There appears to have been some misunderstanding concerning a number of matters. I was unable to attend the meeting proposed late yesterday afternoon due to the lateness of the invitation. I committed to speak with [Ms Walker - Mr Poole’s personal assistant] today to arrange a time for the meeting. Based on your email of 6 August I was waiting on a response from HR on the issue of comparability of the role before arranging the meeting with you, as well as discussing the nature of the role in detail with Rob Price (rather than be inducted into the position as suggested in your latest email). I was unaware that you were waiting on me to arrange a meeting before this information had been provided.

So that there is clarity on my position, I maintain my view that my role is redundant and that the position offered to me is not comparable to the role I currently perform. The further material that you have provided, particularly the Job Description for the new role, reinforces this conclusion.

You referred to a recent review of the Company’s process by an external industrial tribunal. If this refers to the case heard by Commissioner Roberts involving the Finance Sector Union of Australia and the Company in December last year then the case clearly supports the conclusion that my position is redundant and that the role offered is not comparable. That case identified that the critical issue involves a comparison of the respective competencies of the two positions. In the case before Commissioner Roberts the core competencies were identical. A comparison of the Job Descriptions involved here clearly demonstrate that the roles are completely different as are the competencies involved. My current role is a tertiary based Management/Leadership role where the offered position is a non-strategic/non-management report based position with no formal qualifications required. It requires lower skills, abilities and competencies; it has a lower reporting line; it has lower criticality outputs and lower decision making authority. I would assume that it also has a lower salary level (although this information has not been provided). These are all factors in determining that the offered position is of lower work value and meets the definition of Suitable Alternative position in the Redundancy policy. It is clear that the position is not a Comparable position as defined by the policy.

The decision last year was made on the merits of the case rather than on whether the process was fair or reasonable. The decision conclusively supports my case that the offered position is not comparable and I am therefore entitled to the Severance Payment and other benefits provided for in the policy.

While I remain prepared to meet and discuss my situation I confirm my view that the offered role is not comparable and that for the reasons outlined my position is redundant and that I should be retrenched under the terms of the Company’s policy. Both myself and my support person will be available to meet with yourself and HR upon your return either Thursday afternoon or anytime Friday. Please have [Ms Walker] call me to arrange the meeting.

So that there is no doubt on this point, I have not accepted the offered role and no inference can be drawn that I have. Meeting with the Company is for the purpose of discussing my position further to hopefully reach agreement on this issue, and in doing so I reserve all my rights relating to my employment.”

[41] Also on 10 August 2010, Ms O’Donnell wrote to Ms Peart in the following terms 67:

“As communicated to you in our meeting on Thursday 5 August 2010, Allianz has conducted an assessment of the role of National Customer Development Manager, B&A and the role of National Underwriter - Scheme and Facility, B&A and deem them to be comparable roles.

Further to [Mr Poole’s] e-mails of Friday 6 August 2010 and Monday 9 August 2010, I am happy to provide information regarding the process by which we evaluate jobs and assess comparability.

When roes are assessed they are analysed using an external system ‘Job Link’ which was developed by Hewitt Consulting, a Global Remuneration Consultancy organisation. I can confirm that the aspects of each role that are considered are as follows:

• Knowledge and Application

• Problem Solving and Innovation

• Interaction

• Impact

• Accountability

Once a role has been reviewed using the roe Evaluation System, a panel which consists of Tim Dawson - Group HR Manager, Brad Castle - Organisation Capability Manager and Peter Vasili - Compensation and Benefits Manager review the analysis and approve the result.”

[42] On 13 August 2010, Ms Peart wrote to Mr Poole in the following terms 68:

“I refer to the meeting with you and [Ms Anderson], myself and my husband on 12 August 2010 to further discuss my Redundancy.

You confirmed that the position of Allianz is that the position offered to me is comparable to my current redundant role based on ‘Job Link’. Allianz requires that I attend for work on Monday, 16 August 2010, in the new position otherwise I will be treated as having resigned.

My request for further details of the ‘Job Link’ analysis was rejected on the basis that without training on the system I would be unable to understand the results of this analysis. You considered that the factors contained in Allianz’s Redundancy Policy defining the difference between a ‘suitable alternative position’ and a ‘comparable position’ were irrelevant to a consideration of my situation. You expressly dismissed the disparity in the core competencies and job profile between my current role and the proposed role as irrelevant.

Essentially, the position adopted by Allianz in yesterday’s meeting totally disregarded the provisions of the Redundancy Policy and required me to accept assertions of comparability based on other factors without providing any supporting documentation evidencing this analysis.

I confirm my view that the position being offered to me is not comparable to my current role. There is no dispute that my current role is redundant. Based on the Redundancy Policy and an analysis of the Job Description for the new role it is clear that the new position is not comparable. The new role, in fact, involves an offer of ‘suitable alternative employment’ which I am entitled to decline without impacting my rights in respect to retrenchment. However, you have not offered this role as ‘suitable alternative employment’.

I advise that I do not accept the alternative employment proposed by the Company (either as comparable or suitable). I note that the Company has declined to offer ‘suitable alternative employment’ on a trial period as provided for in the Redundancy Policy.

The Company has stated that it expects me to commence in the new role on Monday and if I do not take my seat in the new role I will be treated as having resigned my employment. I reject this ultimatum. The fact is my current role has been made redundant and no ‘comparable’ employment has been offered. In consequence, my employment has been terminated effective Monday, 16 August 2010, in circumstances of Redundancy. In the absence of ‘comparable alternative employment’ I have been retrenched and I am entitled to the severance payments provided for in the Redundancy Policy together with my accrued statutory entitlements.

Please confirm that you acknowledge my entitlements under the Redundancy Policy.”

[43] On 16 August 2010, Mr Poole wrote to Ms Peart in the following terms 69:

“I refer to your letter of 13 August 2010, wherein you advise that you are declining the offer of the Underwriter - Schemes and Facilities position.

I note that you have made this decision on the basis that you do not believe this to be comparable position to your previous role. You appear to have based this decision on a difference in core competencies and job descriptions between the two roles. You have also stated that you have been asked to accept assertions of comparability without any supporting documentation and have added that your request for further details on the job evaluation process was rejected. I note that you have therefore requested payment of severance entitlements.

While I respect your decision to decline this offer, and I would add that I am disappointed that you have come to this decision, I refute your suggestion that you were not offered a comparable role. I also refute your statement that you have not been provided with information about the evaluation process to determine comparability. I would add that our meeting did not occur in the manner characterised in your letter and I am disappointed that you have portrayed our discussion in such an adversarial way.

In my meeting with you on Thursday, 12 August 2010, the company acknowledged that the role of Underwriter - Schemes and Facilities is different from your previous position. A difference in position descriptions or competencies, however, does not mean that positions are not comparable. As explained, the evaluation process used by the company compares positions against a set of established criteria or factors as follows:

• Knowledge and Application

• Problem Solving and Innovation

• Interaction

• Impact

• Accountability

This process, ‘Job Link’, was developed by Hewitt Consulting and does require training to administer. All job evaluations are undertaken by the Compensation & Benefits team within Human Resources, which not only provides consistency in assessments but also enables the reviewer to take into account relativities across the organisation. Undertaking an evaluation or assessment in isolation is likely to deliver a skewed result. Once a role has been reviewed by this team, a further review is conducted by a panel consisting of the Group Manager Human Resources, the Organisational Capability Manager and Compensation & Benefits Manager to review the analysis and approve the results.

As advised to you in our last meeting, the role that has been offered to you is, in fact, graded higher than your current role. The Underwriter - Schemes and Facilities has greater visibility with the senior management team and will have a material impact on profitability. The work will be located in the same office, on the same floor, for the same Division and without variation to your remuneration package. I would add that underwriting roles have significantly greater potential remuneration upside due to this being a core function of the business.

I would also point out that in addition to being provided with a job description, you were also provided with an opportunity to discuss the Underwriter - Schemes and Facilities role in detail with Rob Price, National Underwriting Manager. I have also made myself available to meet with you to discuss the expectations of the Underwriter - Schemes and Facilities. I therefore believe that you have been provided with sufficient information to make a decision about the offer made to you.

Melissa, I acknowledge that change can be difficult. However, Allianz takes its obligation to seek redeployment seriously and I believe that we have fulfilled this obligation to you by offering you a comparable role. I therefore advise that you are not eligible for any severance payment and confirm that today, Monday 13 August 2010 will be your last day of employment. You will be paid your four (4) weeks notice in lieu in addition to any other leave entitlements. Details of your superannuation will be mailed to you separately.

I wish you all the best for the future.”

Written submissions

[44] Both the Applicant and the Respondent filed written outlines of submissions. 70

Ms Peart

[45] The outline of submissions filed on behalf of Ms Peart firstly sets out the jurisdictional basis which the Applicant says enables the Tribunal to determine the application in the terms sought. The submissions go on to argue that: “The issue of whether a new position offered to an employee in a particular case is ‘comparable’ is a question of fact to be determined having regard to all of the relevant circumstances.” They go on to say that: “The test to be applied to determine whether a particular position is a ‘suitable alternative’ position or a ‘comparable’ position is an objective one. That is to say the question whether a particular position is a ‘suitable alternative’ or ‘comparable’ must be determined according to objective standards.” Relevant case law is cited and it is claimed that the Respondent has the onus of establishing that the New Role offered to the Applicant is a comparable position to her Old Role.

[46] The written outline goes on to cite the Applicant’s witness statement in support of the position that the new and old roles are not comparable. A summary of that evidence is set out at paragraph 12 supra.

Allianz

[47] Written submissions on behalf of Allianz argue that the issues for determination by me are: “(a) Was the position offered to the Applicant a ‘comparable’ position for the purpose of the Agreement? and (b) If the position offered was not a ‘comparable’ position, is the Applicant entitled to redundancy payments under the Agreement?”

[48] Allianz argues that the primary object of the redeployment provisions in the Agreement is to avoid retrenchment by the offering of continuing employment by way of redeployment to another role. “It is submitted that the policy behind this provision is to encourage continuing employment and discourage windfall redundancy payments where employees have the requisite skills to fill vacancies.”

[49] “The Respondent has a system in place, known as ‘JobLink’, which is designed to undertake a work value exercise by measuring the relative size of positions within the Respondent in terms of role evaluation criteria identified in the JobLink system. This system was designed by external consultants, Hewitt Associates, and has been in place with the Respondent since January 2010, and at the time the Agreement was approved under the Act. The JobLink system and the role evaluation criteria identified by this system is the only mechanism by which it is possible to determine whether the position offered to an employee is ‘of equal or greater work value’ or ‘relative size’ to the position being made redundant.”

[50] Allianz goes on to argue that its Redundancy Policy should not have determinative value in determining the dispute between the parties as it did not form part of the contractual terms and conditions of Ms Peart’s employment. Allianz does not dispute the jurisdiction of the Tribunal pursuant to the Agreement but “any decision by Fair Work Australia which relies upon the Redundancy Policy would produce a decision which is inconsistent with the terms of the Agreement.”

[51] Allianz argues that Ms Peart’s prior Underwriting experience and skills gave her the requisite skills, abilities and competencies required to undertake the New Role. In addition, the location of the New Role was the same as the Old Role, had a high criticality of outputs and a direct contributions to Allianz’s profits result, a higher decision making authority, the same remuneration level and a greater potential for higher remuneration and career advancement.

[52] Allianz goes on to say that the Applicant has considered that the New Role would be a suitable alternative role while not conceding that it is a comparable role. If the Tribunal were to find that the New Role was a suitable alternative role rather than a comparable role, Ms Peart was not entitled to reject the offer ‘out of hand’. She was required to act in good faith and make a decision during the two month trial period whether she would accept or reject the offer of a suitable alternative position. In acting as she did, the Applicant should not be entitled to receive redundancy benefits.

Final submissions

[53] Both parties made extensive final submissions. In the case of Mr Saunders, these were done orally. In the case of Mr Mellos, they were based on a written ‘aide memoire’ 71 supported by oral submissions.

Mr Saunders

[54] Mr Saunders submitted: “The first legal principle is that the issue of whether the new position offered to Ms Peart is comparable to her old position is a question of fact, to be determined by having regard to all the relevant circumstances. The second relevant principle is that the test to be applied in determining whether the position is comparable is an objective one. That is the question of whether the position is comparable must be determined according to objective standards, by looking at a reasonable person in the position of the applicant. The third relevant principle is that the respondent has the onus of establishing that the position offered to the applicant is a comparable position.” 72

[55] Mr Saunders went on to say: “So even if you get to that position where you have two positions, the same work value, the same size, the tribunal still needs to be satisfied that the redeployed position doesn't entail ‘a change in duties significant enough to be unreasonable’.

The purpose of that clause in my submission is to ensure that an employer can't avoid having to make redundancy payments to an employee whose position has been made redundant and the employer wants the employee to work in a field or an area in which the employee either no skills at all, or has no interest in pursuing a career.” 73

[56] Ms Peart: “made a conscious decision in 2001 to move away from any career in underwriting and to focus her career on customer business development roles, and that was nine years before her position was made redundant. So for 10 out of the 13 years she was employed by Allianz and HIH, and for the last nine years she worked for them, she has focussed her career on customer business development roles and not on underwriting. Mr Poole even said in evidence that he understood the distinction between a career path in customer business development and one in underwriting. That's indeed the election that my client made and one she was entitled make in my submission. The new role offered to Ms Peart was an underwriting, and in my submission it did entail a change in duties significant enough to be unreasonable for somebody who had chosen a very significant time ago to pursue a career away from underwriting, into customer business development roles. The consequence is in my submission that the new position was not a comparable position in accordance with clause 10.2.3(a) of the BPA. It's not just a question of looking at Ms Peart's subjective desires, the objective test requires one to look at what a reasonable person in the position of Ms Peart would've done when offered such a role? You answer that question by looking at what a reasonable person who had made a conscious decision nine years ago to move away from underwriting and into business development would do when offered a role back in underwriting. In my submission it's plain that a reasonable person in that position would reject the role on the basis that the change in duties was significant enough to be unreasonable. ... The first and simple argument is the change in duties was significant enough to be unreasonable, therefore it can't be a comparable position.” 74

[57] Mr Saunders further argued:

Alllianz relied on its internal Redundancy Policy in its dealing with Ms Peart concerning the redundancy of her Old Role and the proposed move to the New Role. The Company cannot now assert that the internal Redundancy Policy is of no value in determining Ms Peart’s application.

The job descriptions of the two roles must be compared to gauge comparability.

Core competencies are lower than leadership. For the New Role nine competencies required a core competency whereas in the Old Role eight out of nine were leadership and only one was core.

If the New Role had the level of criticality of output alleged by Allianz then it would have been remunerated at a higher level.

No increase in remuneration was offered to Ms Peart.

No weight should be given to the JobLink comparison undertaken by Allianz. It was not undertaken until 10 August 2010 and then only after Ms Peart requested details about the comparison process undertaken by the Company.

“... the JobLink assessment was undertaken merely to try and provide an explanation for a decision which has already been made.” 75

An examination of the role evaluation criteria as set out in the Redundancy Policy makes it apparent that the New Role was not comparable to the Old Role.

“She required greater problem solving and innovation in the old role compared to the new one. She required greater interaction in the old role to the new one. She had a greater impact in the old role to the new one. She had greater accountability in the old role to the new one.” 76

The absence of Mr Hatzimichailidis to give evidence for Allianz should cause the Tribunal to draw the conclusion that his evidence would not have assisted the Respondent.

Mr Poole did not have the correct information to make a proper comparison between the two roles.

Ms Peart did not fail to cooperate in the redeployment process. She was put in a situation where she was told on 5 August 2010 that her Old Role was redundant then told that she had 24 hours to respond to the offer of an allegedly comparable role.

Ms Peart: “had a view about her career but she wanted to find out more information about the process undertaken by the respondent. If anyone acted unreasonably or failed to cooperate in the circumstances of this case, it was Allianz. They failed to disclose the real basis of their decision about comparability. All through the meetings, all the through the correspondence they're telling the applicant, even to the stage of getting to these proceedings in their outline of submissions, they're telling the applicant, ‘JobLink, the answer is JobLink. That's the answer, you don't know enough about. You don't understand it. We've satisfied ourselves using JobLink that the role is comparable, therefore I'm sorry, that's the end of it.’” 77

[58] Mr Saunders went on to draw my attention to a number of cases he saw as relevant to my consideration. I have paid regard to those citations.

Mr Mellos

[59] Mr Mellos spoke to, and expanded upon, his written submissions.

[60] Mr Mellos argued that Allianz had undertaken three distinct assessments in coming to the conclusion that the New Role is comparable to the Old Role. Those assessments were set out as:

“(a) consideration of various matters by the decision maker, [Mr Poole] (including matters set out in Redundancy Policy);

(b) JobLink assessment by [Mr Vasili] to determine the relative size of the previous and the offered roles; and

[61] Mr Mellos went on to refer to the JobLink assessment and Mr Vasili’s evidence regarding that matter. A work value assessment between the two roles was made between the relative size of each role. In relation to Ms Peart’s evidence concerning her desired career path, Mr Mellos said: “If the applicant’s reasons for rejecting the role (desire and career pursuit) are based on these subjective and personal matters, it would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay.”

[62] Mr Mellos submitted that Mr Poole was correct in his evidence that the change in career path requested of Ms Peart was not unreasonable and that an employee’s personal desires in that regard are irrelevant.

[63] In relation to the Company’s internal Redundancy Policy, Mr Mellos argued that this policy only provides guidelines for Allianz and its employees.

[64] Mr Mellos went on to argue that the offer of the New Role met all the requirements imposed on Allianz if it wished to offer an employee a comparable position after their former positions had been abolished. In using JobLink, the job descriptions of both roles were converted to factors to make an assessment between the two.

[65] Mr Mellos asserts that the statements and actions of Ms Peart show that even if the position offered to her was of equal or greater work value, it would still have been rejected based on her personal preference regarding her career path. He went on to cite relevant case law and I have paid regard to those citations.

[66] In setting out the final submissions of the parties, I have done so on a short summary basis. However, the submissions both written and oral have been examined in detail in the making of this decision.

Conclusions and Findings

[67] This decision arises from an application by Ms Peart pursuant to s.739 of the Act concerning a dispute which arises from the dispute resolution procedure set out in the BPA. It is not in contention between the parties that the Tribunal is empowered to hear and determine the dispute. It is further not in contention that Ms Peart’s former position of National Customer Development Manager became redundant effective from 9 August 2010 and that Ms Peart was informed of this on 5 August 2010.

[68] It is clear on the face of clause 10.2 (Redeployment and Redundancy) of the BPA that retrenchment of an employee is to be a last resort. The terms of subclause 10.2 obligate Allianz at law to make every endeavour to redeploy employees whose positions have been made redundant. This takes the form in the first instance of seeking a ‘comparable position’ for such an employee and if such a position is not available, to offer a ‘suitable alternative position’ if one is available. The Agreement goes on to set out in some considerable detail the steps to follow.

[69] Should an employee be offered a comparable position then the employee is obligated to take up that position or to leave the employ of Allianz without payment of redundancy benefits. If no comparable position is available and the employee is offered a suitable alternative position then the employee has a period of up to two months to elect whether to accept the suitable alternative position or be paid redundancy benefits. In cases where an employee’s role is abolished and there is no offer of a comparable position or a suitable alternative position then the employee automatically becomes entitled to redundancy benefits, which are set out at subclause 10.2.5 of the BPA.

[70] Allianz is not obligated under the BPA to offer a suitable alternative position (and thus entitle the employee in question to be paid redundancy benefits on their own motion so to speak) if a comparable position is offered. This of course is the core dispute Ms Peart and the Company. Ms Peart maintains that the offer by Allianz of the position of Underwriter, Schemes & Facilities was not the offer of a comparable position and therefore it must have been a suitable alternative position, which Ms Peart was entitled to decline and then receive redundancy benefits which appear to be in the order of $75,000.

[71] In Hawkins and Another v Commonwealth Bank of Australia 78(Hawkins), Moore J considered a provision in an unregistered industrial agreement covering employees of the Commonwealth Bank of Australia (the CBA Agreement) which contained provisions very similar to those which are in contention in this case. His Honour said:

“The operation of the Agreement may be summarised briefly. It is to be noted that cl (e) of the Agreement, which deals with redeployment, contemplates the Bank offering an employee occupying a redundant position, two types of alternative employment. One type is a ‘directly comparable position’ which is defined in cl (c)(ii). I will return to the definition in due course. The other type of employment is a position that is not directly comparable. If an offer of this latter type is made it must be made in writing containing certain particulars: see cl (e)(ix). The employee is then afforded at least two weeks in which to decide whether or not to accept the offer: see cl (e)(iv)(2). Accepting the offer triggers the operation of cl (e)(x) and it is the proper construction of that clause that appears to have been viewed by the parties as critical to the resolution of this application.” 79

[72] In the matter decided by Moore J, the CBA Agreement contained the following definition:

“‘Directly comparable position’ means a position which is at the same classification within the Bank, which does not entail a change of duties significant enough as to be unreasonable in the circumstances of the skills after training in terms of subclause (e)(viii) and abilities of the officer concerned and which is at the same location or at another location which is within reasonable commuting distance.” 80

[73] In Hawkins, Moore J considered the meaning of the word ‘unreasonable’. His reasoning is worth quoting at some length:

“Of critical importance in determining whether the new position was a directly comparable one, is the meaning of the word ‘‘unreasonable’’. Any judgment as to whether the change of duties are significant enough as to be unreasonable would, in my opinion, need to be objective and would involve questions of degree. The language of the definition does not suggest that the unreasonableness of the change in duties turns on the opinion of the employee or the Bank. The word ‘‘unreasonable’’ is found in an adjectival phrase, ‘‘significant enough as to be unreasonable’’, qualifying the nominal phrase ‘‘change of duties’’. The adjectival phrase identifies the extent or magnitude of the change of duties which, if exceeded, renders the new position not directly comparable. Whatever is comprehended by ‘‘unreasonable’’, it requires, as a measure of reasonableness, reference to the existing skills, or future skills after training, and abilities of the officer concerned. It is plain that if the new position requires the performance of a range of new duties and the employee does not possess the skills to discharge those duties, or is unlikely to acquire them after training, then the change of duties is significant enough as to be unreasonable. That is because it is unreasonable to call upon an employee to do work they are unlikely to be able to do with any measure of success. I should add that I do not see any material difference between ‘‘skills’’ and ‘‘abilities’’. Those words appear to be repetitive unless ‘‘skills’’ is intended to describe capacity to do a task that depends on some form of training and ‘‘abilities’’ is intended to describe a more ethereal aspect of a person’s capacity to do particular work. However nothing, in my view, turns on any difference in meaning between those words.

In the present case the relevant question is how the definition is intended to operate if the change in duties is such that the employee plainly has the skills and ability to perform them as Hawkins conceded in relation to the new position, but the skills required reflect only some of the employee’s skills. Two points can be made. First, it is likely that it was contemplated by the parties to the Agreement that the directly comparable position would be at a similar level of responsibility within the Bank and of broadly similar significance to the Bank in terms of the Bank’s operations. This may be inferred from the express requirement that the position be at the same classification. The second is that the three elements in the definition, which are classification, change of duties and location, are, in my opinion, designed to establish minimum standards for the benefit of the employee. This may be inferred not only from the subject matter of the elements but the effect of cl (e)(iii) which has been discussed earlier. The employee is deprived of certain benefits under the Agreement if he or she is offered and rejects a directly comparable position. The definition is framed so as to ensure that the loss of those benefits occurs only if the employee is offered a position that he or she might be reasonably expected to accept because it satisfies those standards.

Given that the definition serves this purpose, it is probable that the parties intended the word ‘‘unreasonable’’ to comprehend not only situations where the changed duties or a significant number of them could not be performed by the employee either immediately or after training, but also any other unreasonable effect on the employee arising directly from and relating directly to the employee’s skills and abilities. It would thus operate in situations where the performance of the changed duties would require the use of only a limited range of the employee’s skills with the potential that the skills would be lost by the employee over time. That is, the range of his or her skills would diminish over time in the offered position because he or she was no longer called upon to exercise them. The loss of those skills may indirectly bear upon the employee’s prospects of promotion in the Bank. There may be other consequences flowing from the offered position requiring the use of a limited range of the employee’s skills which are comprehended by the expression ‘‘significant enough to be unreasonable’’ but they are not readily apparent.

However given that the offered position needs to be at the same classification to satisfy the definition, I do not consider it is likely that the parties intended unreasonableness to be measured by reference to loss of status arising from the use of only some of the employee’s skills. The case advanced by the applicants was that the position offered to Hawkins was, in essence, that of a salesman. The gravamen of the applicants’ case on this issue was that the broad managerial role Hawkins performed, and thus the skills he used, would no longer form part of his duties. There was no suggestion that those skills would be lost to him while performing the duties of a relationship executive. Rather the limited skills he would use as a salesman had a bearing on his own perception of the status of the position, the possible perception of its status by others within the Bank and how that might affect his prospects of promotion to the position he aspired to occupy within the Bank. It could also have a bearing on the perception of those with whom he might deal outside the Bank. Each of these matters really concerns the status of the offered position and they are not, in my opinion, matters to which the relevant part of the definition was directed. Accordingly, the position of relationship executive graded at the SE level was a directly comparable position.” 81

[74] Moore J’s decision in Hawkins was successfully appealed but the reasoning quoted above survived that appeal whilst the ultimate decision of his Honour did not. 82

[75] The issue of personal preference was dealt with in a Full Bench decision of the Australian Industrial Relations Commission in Derole Nominees Pty Ltd 83 where the Bench said:

“... the fact that to reject available alternative employment which is objectively acceptable, by an election based on personal preferences is to place the right to receive full redundancy pay at risk.”

[76] In Commonwealth Bank of Australia v Finance Sector Union of Australia 84, Gray, North and Gyles JJ provide some further guidance which is useful in the current circumstances:

“It may be accepted that the career path for an employee of the Bank who is seconded to work with EDS will be different to the career path which would have existed if the Bank’s information technology division remained as it was, and that, in particular, there will be less opportunity for promotion or advancement in the field of information technology. Counsel for the FSU was not able to refer to any authority which establishes that this consideration is relevant to redundancy as it has been understood before now, whether in relation to redundancy in general or position redundancy. Severance pay is primarily designed to deal with situations in which either the person or the position is redundant in the usual sense of the word and retrenchment follows. Clause 42 extends that notion so that if there is a substantial enough change in duties, or if the location of the job is sufficiently changed, then there is, effectively, a constructive redundancy and if retrenchment follows severance pay becomes payable. Loss of a collateral advantage by virtue of reorganisation is not within the ordinary concept of redundancy ...” 85

[77] I have considered the orders and alternative ‘binding determinations’ sought by Ms Peart. They are set out at paragraph 7 supra. However, I prefer the ‘issues for determination’ put forward by Allianz. Those issues are set out at paragraph 47 supra. In my view, the issues for determination proposed by Allianz are an accurate short form of matters I must consider. The orders sought by Ms Peart are beyond my power to grant. I can only determine the dispute between the parties as to whether the terms of BPA have been correctly applied in Ms Peart’s case. The consequential effect of any such determination would then flow.

[78] The chain of events which ultimately culminated in the ending of Ms Peart’s employment at Allianz commenced at the meeting of 5 August 2010, at which she was told that her Old Role was being abolished and that she was being offered the New Role. In her evidence, Ms Peart said that she immediately told Mr Hatzimichailidis and Ms O’Donnell that she was aware of the New Role and of her view that the New Role was not a comparable one. That version of events at the 5 August 2010 meeting in Ms Peart’s evidence agreed in essence with that of Ms O’Donnell on this point. The correspondence between the parties which is set out at paragraphs 34 to 43 supra then ensued.

[79] It is apparent to me that Ms Peart decided on 5 August 2010 that she would not take the New Role offered. Her requests for further information and justification from Allianz that the two roles were comparable were always intended to bolster her argument about lack of comparability. Such information was never going to persuade Ms Peart to take on the New Role. The 24 hour period offered to Ms Peart to decide whether to take the New Role or not can be seen in that context. On her own evidence, she was aware of the work to be done in the New Role. The fact that Mr Poole considered the New Role to be comparable, although a JobLink assessment was not available until 10 August 2010, is not significant in my view. As a very senior manager at Allianz with access to input from internal sources he was entitled to form the view he did and which he communicated to Ms Peart in his letter of 5 August 2010. The fact that the subsequent JobLink assessment accorded with his initial view only adds support to that initial view.

[80] The absence of Mr Hatzimichailidis to give evidence was in my view unfortunate as he could possibly have given useful evidence concerning the meeting of 5 August 2010 and the assessment of comparability. However, I draw no inference that his evidence would have been detrimental to the Company’s case. The evidence of Mr Poole and Mr Vasili in particular is sufficient in this matter when compared with the evidence of Ms Peart.

[81] Much time was spent during the case about the applicability of the Company’s internal Redundancy Policy to my consideration. That policy does not form part of the BPA but was relied upon by the Company in its discussions with Ms Peart. It is useful in analysing the Company’s approach to the offering of the New Role to Ms Peart but cannot have any determinative value in my decision making. In any event, the internal policy does not appear to fundamentally conflict with the terms of the BPA.

[82] The key element to Ms Peart’s rejection of the New Role as not being comparable lies in her 2001 decision not to pursue a career in underwriting. On her evidence, there was no doubt that she possessed the skills and abilities to perform the New Role but she just did not want to work in underwriting. Other arguments concerning such matters as seniority, decision-making authority, criticality of outputs etc. are all subordinate to the key argument by Ms Peart that the change in duties was unreasonable in the light of her career plans and experience. I am unable to accept her position on this point. Ms Peart was a skilled and valued employee of Allianz and the Company cannot be faulted for making every effort to retain her services. I do not believe that the offering of the New Role was designed by Allianz to avoid redundancy benefits. The Company fulfilled its BPA obligations. It genuinely wanted to retain Ms Peart’s services.

[83] The question of the work value of the New Role loomed large in proceedings. I am satisfied on the evidence of the Company’s witnesses together with the materials submitted into evidence that the New Role was at least comparable to the Old Role. In my view, the primary method of recognising the work value of any position is the salary which attaches to that position. In the case of Ms Peart, her salary and entitlements were to be continued from the Old Role to the New Role. I do not agree with the submissions made that the salary and entitlements of the previous holder of the Old Role are in any way relevant to my consideration. The continuation of Ms Peart’s previous salary and entitlement arrangements in the New Role appears reasonable to me for someone starting out in that role. What salary and entitlement arrangements were to be in the future is an unknown factor.

[84] I accept the evidence of Ms O’Donnell, Mr Poole and Mr Vasili as to the matters within their knowledge and particularly accept Mr Poole’s evidence in relation to the comparability of the New and Old Roles. I further accept the evidence of Mr Vasili in particular in relation to the JobLink assessment process. There is nothing before me to indicate that the JobLink assessment was done on any other than an objective basis. I do not believe it was conducted in such a way as to bring forth a pre-determined result. Where Ms Peart’s evidence differs or is in conflict with that of Mr Poole and Mr Vasili in relation to the comparability issue, I prefer the evidence of Mr Poole and Mr Vasili. I therefore find the Old and New Roles to be comparable in the terms set out at clause 10.2 of the BPA and that Ms Peart’s failure to accept the New Role brought into play subclause 10.2.3(e) of the Agreement with the result that her employment with Allianz ended.

[85] In summary, I find that the New Role offered to Ms Peart on 5 August 2010 was a comparable role to that previously held by her which had been made redundant. In refusing the new comparable role, Ms Peart ended her employment with Allianz. Accordingly, Ms Peart’s application must be dismissed and I so order.

COMMISSIONER

Appearances:

T Saunders of Counsel for Melissa Peart.

S Mellos of Baker & McKenzie for Allianz Australia Services Pty Ltd.

Hearing details:

2010.

Sydney:

December 6, 7, 21.

1 Exhibit Peart 8.

2 Exhibits Peart 2 and Peart 3 respectively.

3 Transcript PN238 and following.

4 Transcript PN250.

5 Transcript PN259.

6 Transcript PN289.

7 Transcript PN300.

8 Transcript PN304.

9 Transcript PN324.

10 Transcript PN414.

11 Transcript PNs509-510.

12 Transcript PN527.

13 Transcript PN566.

14 Transcript PNs652-653.

15 Transcript PNs687-688.

16 Transcript PNs697-698.

17 See Exhibit Allianz 2.

18 Transcript PNs719-720.

19 Transcript PN759.

20 Transcript PNs855 and 961.

21 Transcript PN977.

22 Transcript PNs978-979.

23 Transcript PN980.

24 Transcript PN56.

25 Transcript PN58.

26 Exhibit Allianz 7.

27 Transcript PNs370-372.

28 Transcript PN411.

29 Transcript PN417.

30 Transcript PNs444-445.

31 Transcript PNs466-472.

32 Transcript PN484.

33 Exhibit Allianz 8.

34 Transcript PN699.

35 Transcript PN732.

36 Transcript PN744.

37 Transcript PN792.

38 Transcript PN827.

39 Transcript PNs842-844.

40 Transcript PN945.

41 Transcript PNs946-947.

42 Transcript PNs948-951.

43 Transcript PN955.

44 Transcript PN968.

45 Transcript PN984.

46 Transcript PNs986-988.

47 Transcript PN991.

48 Transcript PN1032.

49 Transcript PN1068.

50 Transcript PN1073.

51 Transcript PN1093.

52 Transcript PN1119.

53 Transcript PN1134.

54 Transcript PN1140.

55 Transcript PN1147.

56 Transcript PN1195.

57 Transcript PN1201.

58 Transcript PN1221.

59 Exhibit Allianz 4.

60 See Attachment C to Exhibit Peart 2.

61 Ibid.

62 See Attachment E to Exhibit Peart 2.

63 See Attachment F to Exhibit Peart 2.

64 See Attachment G to Exhibit Peart 2.

65 See Attachment H to Exhibit Peart 2.

66 See Attachment I to Exhibit Peart 2.

67 See Attachment J to Exhibit Peart 2.

68 See Attachment K to Exhibit Peart 2.

69 See Attachment L to Exhibit Peart 2.

70 Exhibits Peart 1 and Allianz 1 respectively.

71 Exhibit Allianz 9.

72 Transcript PN1243.

73 Transcript PNS1303-1304

74 Transcript PNS1314-1316.

75 Transcript PN1425.

76 Transcript PN1429.

77 Transcript PN1510.

78 66 IR 322.

79 Ibid at 338.

80 Ibid at 354.

81 Ibid at 348-350.

82 70 IR 213.

83 J4414, 12 September 1990.

84 125 FCR 9.

85 Ibid at 29.

Printed by authority of the Commonwealth Government Printer

[2011] FWA 1267

29 JULY 2011