Michael Byrne v Tyco Fire & Security T/A Wormald

[2016] FWC 886

[2016] FWC 886

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michael Byrne
v
Tyco Fire & Security T/A Wormald
(U2015/13872)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 29 FEBRUARY 2016

Application for relief from unfair dismissal – jurisdiction – genuine redundancy – consultation obligations.

[1] On 27 October 2015 Mr Byrne lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of his employment with Tyco Pty Ltd T/A Wormald Fire Systems (Wormald). Wormald objected to the application on the basis that it asserted that the termination of Mr Byrne’s employment was a case of genuine redundancy and hence could not be considered unfair.

[2] This issue was the subject of a conference on 11 February 2016 through a video link between Adelaide, Perth and Sydney and a telephone conference on 22 February 2016. Mr Byrne represented himself and Wormald was represented by its National Industrial Relations Manager, Mr Darby.

[3] Before considering the submissions and evidence before me in this matter, I have summarised the relevant legislative provisions. Section 385 establishes that a person cannot be unfairly dismissed if that dismissal was a case of genuine redundancy. Section 389 defines a genuine redundancy in the following terms:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[4] The Wormald objection was considered as a threshold issue as s.396 identifies it as a matter about which the Fair Work Commission must be satisfied before the merits of the application are considered.

[5] I have based my conclusions as to whether Mr Byrne’s dismissal was a case of genuine redundancy on the evidence before me relative to the requirements of s.389.

[6] Mr Byrne’s evidence confirmed that he worked as a full time portable service technician within the Wormald Fire Division from February 2008. His evidence was that he participated in a conference telephone call on 3 September 2015 in which he and other employees were made aware of impending redundancies in that division. Mr Byrne then commenced a period of annual leave. On 5 October 2015, soon after his return from leave, he was asked to attend a meeting on 6 October 2015. At that meeting he was given a letter 1 which confirmed that Wormald was considering a proposal which had the potential to impact on his current position. At the meeting on 6 October 2015 Wormald management advised Mr Byrne that he had been selected for redundancy. Mr Byrne’s employment concluded on 9 October 2015.

[7] Mr Byrne’s position is that Wormald had not genuinely consulted with him so as to meet the requirements in s.389(1)(b), so that he was able to pursue his unfair dismissal application.

[8] The Wormald position is that the termination of Mr Byrne's employment followed a substantial downturn in the business available to it, that it consulted with Mr Byrne consistent with its obligations and that Mr Byrne did not express interest in the only redeployment opportunity available at that time. Accordingly, Wormald’s assert that the termination of Mr Byrne’s employment met the definition of a genuine redundancy so as to exclude him from unfair dismissal.

The Evidence

[9] Whilst I have considered all of the evidence before me, I have briefly summarised the witness evidence in the following terms.

[10] Mr Wood is the Wormald Western Australian State Sales Manager. Mr Byrne reported to him. Mr Wood’s evidence went to detail the significant contract losses experienced by Wormald over the 12 months prior to the termination of Mr Byrne’s employment. He explained that Wormald had reduced employee numbers nationally by 90 with 25 employees in Western Australia being made redundant as a result of income reductions which, in the Western Australian Fire Department, amounted to around $1 per annum.

[11] Mr Wood detailed the changes Wormald had made to its fire equipment operating systems so as to reduce employee numbers.

[12] Mr Wood’s evidence went to a decision, made around 10 August 2015, to reduce Fire Service Department technician numbers by four employees. A redundancy selection approach was developed and employees were advised on 3 September 2015 of the reasons for the proposed redundancies. Mr Byrne participated in this meeting. Employee feedback was invited but no suggestions were made. Mr Wood’s evidence was that the meeting outcome and an invitation for expressions of interest in voluntary redundancy were confirmed in a letter to the relevant employees, including Mr Byrne, on 3 September 2015. 2

[13] Mr Wood’s evidence went to the steps Wormald took to try to find alternative positions for the employees to be made redundant. He outlined the selection approach which culminated with Mr Byrne being made redundant on 9 October 2015.

[14] Mr Tissong is a Wormald Human Resource Advisor. His evidence went to the conduct of a meeting with employees on 3 September 2015 and to the steps which he took to try to find alternative employment for the employees likely to be made redundant. His evidence was that a Western Australian position for a Fire Equipment Supervisor became available in September 2015 and that while this was bought to the attention of the technicians no one expressed interest in it.

[15] Mr Byrne's evidence went to his employment with Wormald. He detailed his limited participation in the telephone conference on 3 September 2015 before he went on leave until 29 September 2015. Mr Byrne advised that he was given a letter which confirmed that he should attend a meeting on 6 October 2015 as Wormald was considering a change which could impact on him. He attended that meeting and was advised that he would be made redundant. Written confirmation of this decision was provided to him. Mr Byrne finished working for Wormald on 9 October 2015.

[16] Mr Byrne’s employment was covered by the Wormald Portable Service & Sales Division Perth Enterprise Agreement 2015-2018 (the Agreement). The approval decision for that Agreement 3 states:

“[4] Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.”

[17] Further, clauses 9 & 15 of that Agreement state:

“9. CONSULTATIVE MECHANISMS

9.1 The parties agree that a precondition for the effective operation of this agreement is the establishment of an agreed consultative mechanism within the Company. The consultative mechanism shall be established in accordance with the guidelines set out in Appendix 3 hereto.

9.2 Three (3)-employee representatives shall participate in the consultative mechanism established within the Company, provision for a proxy member shall be provided in any period of absence by any employee representative.

9.3 The Regional/State Manager of the Company and another Company management representative shall have a standing invitation to participate in the consultative mechanism established within the Company.”

…

15. CONSULTATION

The company will continue the current process of consultation with employees subject to this agreement, through the operation of the Consultative Committee. In particular, any matters that may have a serious effect on work volume, overtime, or job security will be discussed in consultation with the committee without unreasonable delay.

Should there be alterations to existing Regulations or a reduction of current routine service requirements and result in the rationalisation of the existing workforce, the Consultative Committee will be involved in the process and consultation to change will be in line with the Fair Work Act 2009.”

[18] Appendix 3 of the Agreement relevantly states:

“APPENDIX 3 JOINT CONSULTATIVE MECHANISM GUIDELINES

1. The parties are committed to ensuring that the intentions of this Agreement are realised. It is accepted that improved communications at the workplace can make a significant contribution to these objects.

2. It is agreed by the parties that a precondition for the effective operation of this enterprise agreement is the establishment of agreed consultative mechanisms within the company.

3. a). A joint consultative committee may be established where more than 5 employees are employed by the company and the company have consented to its establishment.

b). Where no joint consultative committee is established in accordance with 3 (a) appropriate consultative mechanism are to be established by agreement of the parties.

4. Where consultative committee is established in accordance with the clause, the role of the consultative committee will be:

a). to monitor the implementation and on-going operation of this Agreement;
b). to develop and monitor the key productivity improvements provided for in this Agreement and to measure the effectiveness or those initiatives; and
c). to monitor the implementation of the training measures provided in this Agreement the purpose of which will be to advance the concept of continuous workplace training and skill enhancement.

[19] The conference on 22 February 2016 specifically dealt with the operation of clause 9. The Wormald position was that:

“3. In the Company’s submission it believes, clause 15 is not relevant to the Commission’s consideration of s389(1)(b). In respect to that the Company makes this submission on the following grounds:

a. Clause 15 refers to a Consultative Committee. Clause 9 provides for the establishment of an agreed consultative mechanism “in accordance with the guidelines set out in Appendix 3”.

…

i. Accordingly, even if such a committee had been established, there would be no requirement to consult with the committee about potential redundancies because such matters do not form part of the stated role of the committee.”

[20] In the 22 February 2016 telephone conference, Mr Byrne confirmed that his position remained that he had not been properly consulted with respect to his redundancy.

Findings

[21] Before considering the specific provisions of s.389, I have briefly summarised the conclusions I have reached on the evidence before me.

[22] Wormald lost significant business in 2015 and restructured its fire department operations so as to require substantially fewer staff. These changes in its operational requirements meant that it no longer required the job being done by Mr Byrne to be undertaken. There is no evidence that supports a contrary conclusion.

[23] Wormald advised the employees potentially affected by these changes, of the likelihood of redundancies within 3 weeks of the decision to reduce staff. Whist it could potentially have done so at an earlier time I have accepted that this advice was provided well before the final redundancy selection decisions were made.

[24] I have accepted that, with the exception of the Fire Equipment Supervisor position which became available in September, there is no evidence of any alternative positions which may have suited Mr Byrne’s skills. I have concluded that Mr Byrne was not aware of this position as he was on leave from 3 September to 29 September. Notwithstanding this, I have also accepted Mr Byrne’s advice that he did not consider himself to be suited or qualified for this Fire Equipment Supervisor position.

Consideration of s.389

[25] I am satisfied that the requirements of s.389(1)(a) are met in these circumstances. Simply put, the contract losses and restructuring by Wormald meant that Mr Byrne’s position was no longer required.

[26] In terms of s 389(1)(b), consideration of the consultation obligations in the Agreement is complicated by the extent to which, bluntly, that Agreement is poorly drafted. At the outset I note that Mr Darby became frustrated over the extent to which I did not immediately accept the Wormald position with respect to compliance with the Agreement consultation obligations, but the manner of the drafting of that Agreement is inherently inconsistent.

[27] I have decided that the model consultation provision, incorporated into the Agreement by virtue of the approval decision, must be considered as well as the relevant Agreement provisions. There is nothing that confirms that the incorporation of those model provisions is at the expense of the existing Agreement requirements.

[28] In terms of the model consultation requirements, I am satisfied that Wormald met these consultation obligations. While this consultation discussion may have been commenced earlier and could have been more extensive and informative, on 3 September and 6 October Mr Byrne was clearly advised of redundancies which were the consequence of the contract losses and changes being made. To the extent that Mr Byrne contends that the consultation requirement required Wormald to give him an opportunity to discuss why he was selected for redundancy as distinct from other employees, I am not satisfied that the model redundancy consultation obligation requires or anticipates such an obligation.

[29] In terms of the Agreement provisions, I have adopted a construction of these somewhat convoluted provisions, in the following terms. Clause 9 requires the establishment of an agreed consultative mechanism consistent with Appendix 3. That Appendix requires the establishment of an agreed consultative mechanism. 4 Appendix 3, clause 3, has the effect of providing for two consultative approaches. Clause 3(a) refers to a joint consultative committee subject to Wormald consent. Clause 3(b) represents the default option which is required to be established, by agreement, as an alternative. Clause 4 deals with the role of the consultative committee. That role statement does not specifically refer to redundancy circumstances. However, Clause 15 of the Agreement makes consultation through either of the options in clause 3 of Appendix A mandatory in a situation where there is to be a reduction in the workforce. Consequently, there is an obligation on Wormald to establish a consultative committee consistent with Appendix A, clause 3, and to involve that committee in consultations relating to the redundancies. Simply put, that did not happen. Wormald is not able to argue that the Agreement provisions can be overlooked because no consultative committee has been established under this Agreement, or its predecessors, as that would require that the Agreement provisions to which it agreed, be ignored. Accordingly, I am not satisfied that the consultative requirements of the Agreement have been met.

[30] In terms of redeployment opportunities, I have accepted the evidence of Mr Tissong which confirms that with the exception of the Fire Equipment Supervisor position, there were no positions to which Mr Byrne could have been reasonably deployed over the period in question. I consider it would have been reasonable for Wormald to have taken steps to alert Mr Byrne to this position whilst he was on leave, so that he could express interest in it. In this respect I have noted that, whilst Mr Tissong’s evidence confirms that applications after the closing date of 25 September 2015 would have been considered, the evidence indicates that the position was advertised from 22 September to 25 September 2015. Mr Byrne was away on leave over this time. Were it not for Mr Byrne’s evidence, that he did not consider he was suited or qualified for this position and would not have sought it, the failure to alert him to the position might otherwise have represented a deficiency in terms of s.389(2).

[31] Section 389 requires that each of the characteristics of a genuine redundancy must be met. In this situation, I am not satisfied that the consultative committee obligations in the Agreement have been complied with. As a consequence I do not consider that the termination of Mr Byrne’s employment can be considered to be a case of genuine redundancy. The Wormald objection, made on this basis, must be refused and Mr Byrne’s application will be referred for conciliation. An Order (PR576912) to this effect will be issued.

[32] One final comment is appropriate in these circumstances. In a number of respects, Mr Byrne’s circumstances may be regarded as analogous with those considered in Harvey v UES Int’l 5 in that, if the termination of his employment is ultimately regarded as unfair because of a failing in the consultation process, the Fair Work Commission may not have the capacity to review why Mr Byrne was selected for redundancy and the amount of compensation may be limited to the length of time associated with complying with the requisite consultative obligations. A copy of that Full Bench decision will be provided to the parties as it may represent useful guidance if the parties seek to resolve this matter through a negotiated settlement.

Appearances:

M Byrne on his own behalf.

P Darby for the respondent.

Hearing (Determinative Conference) details:

2016.

Adelaide (with video-links to Sydney and Perth)

February 11.

 1   Exhibit A2, Attachment A

 2   Exhibit R2

 3   [2015] FWCA 8399

 4   Appendix 3, para 3

 5   [2012] FWAFB 5241

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<Price code C, PR576911>