Michael Elrick v TJS Services T/A TJS Cleaning Services (Melbourne) Pty Ltd

[2013] FWC 2862

[2013] FWC 2862

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michael Elrick
v
TJS Services T/A TJS Cleaning Services (Melbourne) Pty Ltd
(U2012/15796)

COMMISSIONER GREGORY MELBOURNE, 4 JULY 2013

Genuine Redundancy.

Introduction

[1] This is an application alleging unfair dismissal brought by Mr Michael Elrick, (the Applicant) under s.394 of the Fair Work Act 2009 (the Act). The Applicant was employed by TJS Services t/as TJS Cleaning Services (the Respondent) from 24 April 2012 until his employment was terminated on 13 November 2012. The Applicant appeared on his own behalf and provided submissions and witness evidence. One further witness gave evidence on his behalf and another witness who was summonsed to appear at the request of the Applicant also gave evidence. The Respondent was represented by its Support Services Manager, Mr Neville Nixon. Two witnesses gave evidence on behalf of the Respondent.

The Issue to be Decided

[2] The Applicant was made redundant on 13 November 2012 because the Respondent had restructured its Sales Business Development area and his position was no longer required. The Respondent claims the Applicant’s dismissal was a case of genuine redundancy and objects to the application on that basis. Section 385 of the Act provides, inter alia, that a dismissal is not a case of unfair dismissal if it was a “genuine redundancy”. 1

[3] Section 396 of the Act also requires that before any consideration of the merits of an unfair dismissal application various matters are required to be determined including:

“whether the dismissal was a case of genuine redundancy.” 2

[4] Accordingly, if it is determined that a dismissal is a case of genuine redundancy, as provided for by the Act, then there is no requirement to determine whether the dismissal was harsh, unjust or unreasonable and the application must be dismissed.

[5] Section 389 of the Act deals with the meaning of genuine redundancy. It provides:

“(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.” 3

[6] The Applicant does not take issue with the fact that his job was made redundant because of changes in the operational requirements of the Respondent’s business. It is also agreed between the parties that there was no modern award or enterprise agreement that applied to the Applicant’s employment and required consultation about redundancy.

[7] However, the Applicant submits his dismissal was not a case of “genuine redundancy” because, pursuant to section 389(2), it would have been reasonable in all the circumstances for him to have been redeployed elsewhere within the Respondent’s enterprise. The issue to be determined is, therefore, whether it would have been reasonable in all the circumstances for the Applicant to have been redeployed within the Respondent’s enterprise. This decision is accordingly concerned, in particular, with the submissions and evidence that relate to the determination of this issue.

The Submissions and Evidence

[8] The Applicant states that on Tuesday 30 October 2012 the Respondent’s General Manager in Melbourne, Mr Danny Williams, asked him to come to his office. He was then told his employment was to be terminated as a result of “cost-cutting” initiated by the head office in Sydney. 4 Mr Williams advised the decision had been made by the Chief Operating Officer, Mr Ben Bayot, and there was nothing more that he could do. He was then handed a letter headed “employment termination notification” dated 30 October 2012 confirming his employment was terminated with effect from Tuesday 13 November 2012 and indicating:

“As stated the Company has restructured the sales business development area and your position is no longer required.” 5

[9] The Applicant said there was no process of consultation about this decision and prior to this time he had been assured he would be part of the business and had been praised on a number of occasions by management who were impressed with his “work ethic” and “commitment to growing the business”. 6

[10] On 30 October 2012 the Applicant said an advertisement appeared on the ‘Seek’ website requesting applications for a Business Development Manager in the cleaning industry based in Victoria. Upon further investigation he discovered this role was being advertised as a position with the Respondent, however, at no stage was he offered the opportunity to apply for the role. It was based in Geelong and in his submission “was an ideal opportunity for my redeployment”. 7 He had previously acted in that role and had similar experience with a previous employer. He had also commuted from Melbourne to Geelong to work in the past. In his submission a suitable redeployment position was being actively canvassed at the time of his dismissal and was filled shortly after. The Respondent did not seek to cross examine the Applicant about the evidence contained in his witness statement.

[11] Ms Caroline Whitty is the wife of the Applicant. On 7 November 2012 she stated she was asked by her husband to obtain information about a job advertisement on ‘Seek’ for a Business Development Manager in the cleaning industry. Her husband explained he was trying to find out whether the advertisement was for a role at TJS Services. She rang Hayes Recruitment, the company that had placed the advertisement, and spoke with Ms Jessica Thornton who explained the role was for a Business Development Manager in Geelong working for TJS Services. She later told her husband about this conversation.

[12] In cross examination she acknowledged she was not inquiring about the role on her own behalf but at the request of the Applicant.

[13] Ms Jessica Thornton was subpoenaed to appear at the request of the Applicant and, as such, did not provide a witness statement. In her examination in chief she said she worked with Mr Danny Williams on the recruitment of a Client Services Manager for the Respondent in Geelong. She first met Mr Williams on 30 October 2012 after he called her to discuss the recruitment of a Client Services Manager in Geelong at a salary of $55,000 per annum plus superannuation. She understood he had approached her because he had been unable to source a candidate himself. The meeting had taken place at Mr Williams’ office at TJS Services.

[14] In cross examination she indicated she subsequently shortlisted three candidates for Mr Williams, each of whom was interviewed, with an offer of employment subsequently being made to one of those candidates. However, Mr Williams then told her HR had “not given him permission or said they want to recruit it internally,” 8 and she had to advise the successful candidate accordingly. She was also asked about Ms Whitty’s evidence. She could not recall speaking to her, or anyone of that name, and said the role advertised was for a Client Services Manager, rather than a Business Development Manager.

[15] The Respondent submits the Applicant’s dismissal was a case of genuine redundancy due to operational requirements and a change in the business structure of the company. It submits that at the time the Applicant was made redundant there was no other position available that he could be redeployed to. Other positions may have become available subsequently, but were not available at the time of his dismissal.

[16] Mr Ben Bayot is the Respondent’s Chief Operating Officer and based in Sydney. He said a review of the Respondent’s business plan in the second half of 2012 indicated a degree of duplication in roles across each State and the head office. This particularly applied in Victoria. A decision was accordingly made to “streamline some roles” 9 resulting in nine redundancies around the country, including that of the Applicant.

[17] He said that following the restructure all new appointments had to be approved by him and he was not aware of any requests at the time of the Applicant’s dismissal for further recruitment of new employees. In response to a question about whether redeployment had been considered instead of redundancy he stated:

“It was, Commissioner. The redundancy was the last option for us. Relevant to what roles that they currently held to what was available, it was considered and, unfortunately, there was nothing equivalent and obviously there was a reduction in the number of staff.” 10

[18] He also indicated that some staff took on additional responsibilities but no one was actually redeployed.

[19] In cross-examination he indicated he was unaware of any meeting between Mr Williams and Ms Thornton, but that all State Managers are regularly contacted by recruitment agencies with candidates on their books that they are looking to place in employment. He also indicated he was not questioning the evidence of Ms Thornton but did not know whether she had met with Mr Williams or not about the recruitment of a person in a role in the Geelong office.

[20] Mr Danny Williams is the Respondent’s State Manager in Victoria and has been in this role for six years. He originally employed the Applicant and was also involved in the meeting with him on 30 October 2012 to advise he was to be made redundant. He said he told the Applicant at the time:

“We have come to the end of your probation period and due to a National Restructure of the Sales Department I am disappointed to tell you we have unfortunately made you redundant.” 11

[21] He stated it was a case of genuine redundancy and the restructure was the result of the introduction of a new business model. As part of that restructure business development would now become a service line carried out from the Respondent’s head office. He said he had not advertised a role for a Business Development Manager in Geelong, and no other positions in the company were available at the time of the Applicant’s dismissal.

[22] In his examination in chief Mr Williams said he could not recall any meeting or discussions with Ms Thornton on 8 November and no positions in Victoria had been advertised since the Applicant was made redundant. He also indicated that he had nothing against the Applicant and “ ... was quite happy with him personally”. 12 It was simply a case of there being no positions available for him as a consequence of the restructure.

[23] In cross-examination he said he recalled meeting with Ms Thornton but was not sure of the exact date that occurred. He denied giving Ms Thornton authority to advertise for a role in Geelong and said recruitment companies sometimes:

“…advertise on behalf of the company with or without our permission.” 13

[24] He stated that there was no position being filled for a Client Services Manager role in Geelong at the time of the Applicant’s termination. However, there was a person appointed to a role in Geelong “four weeks ago” 14 because another employee had left the company. Mr Williams also indicated that apart from his role as State Manager the Victorian operations involved an Administration Assistant, a State Operations Manager, a Regional Manager and four Client Services Managers or Area Managers, plus one Business Development Manager. He also indicated that in the six years he had been the State Manager he had not had to manage a situation involving employees being made redundant. However, at the time of the Applicant’s termination there were no other positions available that he could be redeployed into. There were also no other employees made redundant in Victoria at the time.

Consideration

[25] The relevant provisions of the Act have already been set out in this decision. Section 396 provides that a dismissal cannot be an unfair dismissal if it was a “genuine redundancy”, as defined. Section 389 defines “genuine redundancy”. In the context of this matter only one aspect of that definition is relevant, as follows:

“(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.” 15

[26] As indicated, it is agreed the other requirements of the definition of “genuine redundancy” in s.389 of the Act are not relevant to the determination of this matter. It is conceded by the Applicant that his previous role is redundant. It is also agreed, as earlier stated, that no modern award or enterprise agreement imposed a requirement upon the parties to consult about the redundancy as otherwise required by s.389(1)(b) of the Act.

[27] The Applicant submits it was reasonable in all the circumstances for him to be redeployed to a Client Services Manager position in Geelong that the Respondent was looking to fill at the time he was made redundant. It was a more junior position with a salary of $55,000 per annum compared with the salary of $70,000 he was receiving at the time of his termination. It was also located in Geelong, rather than Melbourne where the Applicant had been working and living. However, the Applicant submits he had previous experience in a similar role with another employer. He had also worked previously in Geelong and commuted to work from Melbourne.

[28] In terms of whether this role was available the Applicant’s evidence is that the position came to his attention because it had been posted on the ‘Seek’ website. The Applicant also points to the evidence of Ms Jessica Thornton, a Recruitment Consultant with Hayes Recruitment. She stated she was contacted by Mr Danny Williams, the Respondent’s State Manager in Victoria and was requested to advertise and to fill a Client Services Manager position in Geelong. She said this contact occurred on 8 November 2012, the Applicant’s last day of employment with the Respondent. She subsequently advertised and shortlisted three candidates and one was selected for the role, before she was then contacted again by Mr Williams and told the situation had changed and the company now proposed to recruit internally to fill the role.

[29] The Applicant’s wife also rang Ms Thornton to make enquiries about the advertised role on behalf of her husband, and was told Ms Thornton was recruiting to fill a Business Development Manager role in Geelong. The Applicant later acknowledged the witness had intended to refer to a Client Service Manager role, rather than the Business Development Manager position she referred to. The Applicant also submitted that a person had been appointed to a new role in Geelong recently.

[30] The Respondent submits there was no other role available at the time the Applicant was made redundant. The Chief Operating Officer, Mr Ben Bayot, gave evidence that following a company restructure last year any new appointments made had to be authorised by him. No such request had been received from anyone in Victoria at the time the Applicant was made redundant. He also stated that recruitment companies are often looking to make contact to offer potential candidates for employment, regardless of whether a business is actually looking to fill positions at the time.

[31] Mr Danny Williams is the State Manager of the Respondent in Victoria. His evidence was that no position existed in Victoria at the time of the Applicant’s termination and he denied giving Ms Thornton the authority to recruit for a Customer Service Manager position in Geelong. He also said recruitment companies have been known to advertise various positions for the purpose of identifying potential candidates, regardless of whether they have authority to do so from a client or not. He agreed a person had recently been appointed in Geelong, but that only occurred “four weeks ago”. 16 That appointment was made because another employee had left and needed to be replaced. This situation had arisen several months after the Applicant left the company.

[32] The Applicant sought to rely on the decision in Mr Georg Thomas
v InfoTrak Pty Ltd T/A InfoTrak 17handed down by Commissioner Roe in February 2013. The Commissioner did find in that matter that there was no “genuine redundancy”, but did so on the basis that the employer had not complied with the obligation to consult contained in s.389(1)(b) of the Act. However, that obligation only arises when an applicable modern award or enterprise agreement contains an obligation to consult about redundancy. The Commissioner found in that matter that the Professional Employees Award 201018 applied to the Applicant’s employment with the Respondent and contains the requisite consultation obligation in clause 9. He found that clause had not been complied with and therefore the requirements to constitute a “genuine redundancy” had not been met. The situation is different in the present matter. Neither party asserts that a modern award or enterprise agreement applies to the Applicant’s employment with the Respondent. I am satisfied this is the correct approach. The Applicant was employed as a Business Development Manager on a salary of $70,000 per annum. I am satisfied no award or enterprise agreement has application in those circumstances and consequently there was no requirement to consult about the redundancy in accordance with s.389(1)(b) of the Act.

[33] In the above matter Commissioner Roe was also required to consider whether it would have been reasonable in all the circumstances for the Applicant to be redeployed within the employer’s enterprise. In doing so he made reference to the Full Bench decision in Ulan Coal Mines Limited v Honeysett and others 19 noting it dealt with the way in which s.389(2) of the Act should be approached. The Full Bench stated in that decision:

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

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

[28]Thirdly, the question posed by s.389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.” 20

[34] The Full Bench continued to consider what may be relevant in whether or not redeployment would be reasonable. It stated:

“Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it.” 21

[35] The Commissioner was, accordingly required to consider whether redeployment would have been reasonable in the circumstances of that matter. The Applicant pointed to three options for redeployment that should have been considered, however, subsequently accepted that two of those advertised positions had been filled. In regard to the third position Commissioner Roe stated (references omitted):

“The third of these positions was a senior developer position. The Respondent says that this position was advertised and filled on 27 August 2012. The Applicant doubts this was the position. The Applicant points to an advertisement for the position which was still in place after this time. However, the Respondent says that the spreadsheet it produced covered all positions filled by the Respondent and that there have been no subsequent positions filled in the period from October 2012 to February 2013 except for replacements for the persons who were in the tester and the developer position referred to earlier. The Applicant produced no evidence to contradict this. I cannot conclude that it would have been reasonable to redeploy the Applicant into the senior developer position as I am not satisfied that the position was available.” 22

[36] The Commissioner concluded that in all the circumstances he was not satisfied it would have been reasonable to redeploy the Applicant. He did, however, find that the circumstances in that matter did not involve “genuine redundancy” as required by s.389 of the Act but did so on the basis of the failure to consult, as required, by the relevant modern award. That situation is not relevant in the context of the present matter.

[37] The issue of what constitutes “genuine redundancy” was also considered by Senior Deputy President Richards in the matter of Mr Bruce McAlister v Bradken Ltd 23. The Senior Deputy President made reference to the Explanatory Memorandum in the course of that decision. The following extracts are relevant in the context of the present matter in terms of providing some further illustration in regards to what is intended by the consultation and redeployment obligations, including confirmation that the requirement to consult is not an absolute obligation but one derived from a relevant award or enterprise agreement. The relevant paragraphs from the Explanatory Memorandum are as follows:

“1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy.  This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed.  For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.” 24

[38] Senior Deputy President Richards was required to consider in that matter the extent of the employer’s obligation to provide reasonable redeployment opportunities. He stated (references omitted):

“[38]The Applicant contended that there was a positive obligation to identify positions for which the Applicant was capable of performing other than in relation to the position that the held at the time of the redundancy.

[39] I cannot discern from where such an obligation might arise. The meaning of a genuine redundancy at s.389(1)(a) of the FW Act is in relation to “a person’s job” at the time of the alleged redundancy and evidences no intention to take on a wider meaning for the purposes of s.389(2) of the FW Act.

[40]In my view, if the FW Act intended that an employer was required by virtue of s.389(2) of the FW Act to identify any position at all that an employee may be able to perform it would have expressly so directed, and perhaps with some conditionality as to the range of such alternative positions which might be so identified.

[41]In any event, it is most unlikely that at the time of the redundancy when, as the evidence showed, so many of the Bradken Limited businesses were reducing employee numbers that such an opportunity might have been available.” 25

[39] Senior Deputy President Richards continued to conclude that the Applicant’s employment in that matter was terminated by reason of “genuine redundancy.”

[40] I am satisfied that the question that must be answered in the context of s.389(2), given these authorities, is whether redeployment within the employer’s enterprise or an associated entity would have been reasonable at the time of the Applicant’s dismissal.

[41] I have no reason to doubt the evidence of the Applicant, or that of Ms Whitty or Ms Thornton, indicating that at the time the Applicant was dismissed a Client Services Manager role with the Respondent was being advertised, and this had come about apparently, based on the evidence of Ms Thornton, at the initiative of Mr Williams. Mr Williams denies this was the case and indicated recruitment companies often initiate advertisements in advance of positions actually being available. I accept this might occur on occasions based on the evidence also of Mr Bayot, however, I also note Mr Williams was an unconvincing and evasive witness, particularly in regard to whether or not he had met with Ms Thornton as she attested. However, I am also satisfied based on the evidence of Ms Thornton that she was subsequently told the appointment of a person in a role in the Geelong office was not going to proceed. I also note the evidence of Mr Bayot that he had sole responsibility for authorising new appointments and had not given any authority to fill a position in Geelong or anywhere else in Victoria at the time the Applicant’s position was made redundant. In all the circumstances I am not able to determine any reason why a position was for a period of time advertised, as the witnesses attested, other than perhaps the authority of those in the Victorian office had been exceeded.

[42] I am accordingly unable to conclude based on the evidence and submissions before the Commission in this matter that any vacancy or redeployment option existed at the time of the Applicant being made redundant and therefore, particularly given the evidence of Mr Bayot, there was not another position available at the time that he could reasonably have been redeployed into. The evidence does indicate that a position has since been filled in the Geelong office that might have been able to have been filled by the Applicant but apparently this vacancy only became available more than four months after the Applicant was made redundant. I am accordingly not satisfied that there is sufficient evidence before the Commission to indicate or conclude it would have been reasonable in all the circumstances for the Applicant to have been redeployed by the Respondent in accordance with s.389(2).

[43] I accordingly find the Applicant’s dismissal was a case of “genuine redundancy” pursuant to s.385 and therefore the application must be dismissed.

COMMISSIONER

Appearances:

The Applicant appeared on his own behalf.

Mr N Nixon, the Support Services Manager appeared on behalf of the Respondent.

Hearing details:

2013.

Melbourne:

8 April.

 1   Fair Work Act 2009 (Cth) at s.385

 2   Ibid at s.396(d)

 3   Ibid at s.389

 4   Exhibit E1 at page 1

 5   Ibid at Appendix C

 6   Ibid at page 3

 7   Transcript at PN20

 8   Ibid at PN126

 9   Ibid at PN169

 10   Ibid at PN178

 11   Exhibit N2 at page 1

 12   Transcript at PN317

 13   Transcript at PN266

 14   Ibid at PN275

 15   Fair Work Act 2009 (Cth) s.389(2)

 16   Transcript at PN275

 17   [2013] FWC 1134

 18   MA000065

 19   [2010] FWAFB 7578

 20   Ibid at [26]-[28]

 21   Ibid at [34]

 22   [2013] FWC 1134 at [27]

 23   [2010] FWA 203.

 24   Explanatory Memorandum, Fair Work Bill 2009 (Cth) at para 1550-1552.

 25   [2010] FWA 203 at [38]-[41]

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