Mr Aaron Denis White v Kabi Organic Golf Course

[2011] FWA 8348

[2011] FWA 8348

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Aaron Denis White
v
Kabi Organic Golf Course
(U2011/7833)

COMMISSIONER SPENCER BRISBANE, 2 DECEMBER 2011

Application for unfair dismissal - jurisdictional - genuine redundancy

[1] This decision relates to an Application made to Fair Work Australia (FWA) pursuant to s 394 of the Fair Work Act 2009 (the Act), by Mr Aaron Denis White (the Applicant).

[2] The Application relates to the termination of the Applicant’s employment from Kabi Organic Golf Course [and Orchard] (the Respondent). The Respondent objected to the Application on the ground that the termination was a case of genuine redundancy as per the definition in s 389 of the Act.

[3] The Applicant asserted that in accordance with s 385 of the Act, his dismissal was unfair and not a case of genuine redundancy.

[4] The Applicant was self represented and the Respondent was represented by Mr Clifford of Clifford Gouldson Lawyers.

[5] Directions were originally set for the filing of material in relation to the merits of the matter and the jurisdictional objections made by the Respondent. The matter was then set down for hearing of all matters in relation to jurisdiction and the Applicant’s contentions that the termination was a case of an unfair or unlawful dismissal.

[6] The Respondent later confirmed that the only jurisdictional objection they were pursuing was that of the termination being effected as a case of ‘genuine redundancy’.

[7] In response to matters raised by the parties, two Directions conferences by telephone were held; regarding procedural issues. A series of difficulties arose as to the proposed hearing place and dates, and the unavailability of witnesses at particular dates and their impediments to attending at various courthouses, which provided difficulties in listing the matter.

[8] The Applicant was based on the North Coast, near the Respondent’s Golf Course. The Respondent Ms Merchant had moved to North Queensland and on the basis of medical evidence, was unable to participate in a hearing. The Respondent’s solicitor was based in Toowoomba. The Respondent’s Accountant was based in Brisbane, and was concerned at having to spend time away from his practice to attend a hearing on the North Coast. Further, the Applicant stated his medical condition precluded him from travelling by car to Brisbane. The Respondent at the time of the initial proposed listings also had one of the Directors and the Company Accountant unable to attend due to other commitments. The Applicant also had a witness overseas at the time. The Applicant also sought “orders requiring persons to attend” for 2 witnesses, based on the North Coast.

[9] In consideration of these range of issues and on reviewing the material once the Directions had been discharged and the written evidence and submissions assessed, it was clear that the jurisdictional matter should be dealt with initially, in accordance with s 396. Given there were contested facts between the parties, a Directions hearing was set to consider the listing of the jurisdictional matter pursuant to s 396 and s 397 by telephone. The matter was listed for Directions hearing by telephone and a comprehensive listing setting out the legislative provisions was provided to the parties. Taking into account all of these issues, the jurisdictional hearing was listed to occur by telephone. However given the Applicant, after the Directions hearing indicated he could now travel to Brisbane, the hearing was listed for Brisbane on 16 November 2011 with final submissions provided by consent by telephone, after the transcript, was made available to the parties.

Relevant legislation to the procedural issues of conduct of matters before Fair Work Australia

[10] Section 396 states that FWA must consider a number of matters before considering the merits of the Application.

“Initial matters to be considered before merits

FWA must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a)  whether the application was made within the period required in subsection 394(2);

(b)  whether the person was protected from unfair dismissal;

(c)  whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d)  whether the dismissal was a case of genuine redundancy.”

[11] It is necessary to consider the jurisdictional issue of the genuine redundancy (s. 389) in the first instance. If the termination of the Applicant’s employment was a case of genuine redundancy, then the s 394 application, is jurisdictionally barred and cannot proceed.

[12] In deciding how this matter was to be appropriately progressed, the provisions relating to conduct of matters before FWA are relevant.

Section 589 - Procedural and interim decisions

Section 589(1) states:

“(1) FWA may make decisions as to how, when and where a matter is to be dealt with. ........”

[13] Further to this, specifically in relation to applications made pursuant to s 394, the initial matters to be considered under s 396; were dealt with prior to consideration of the merits.

Section 397 matters involving contested facts states:

“FWA must conduct a conference or hold a hearing in relation to a matter arising under this Part if, and to the extent that, the matter involves facts the existence of which is in dispute.”

[14] By consent, the Applicant’s matter was heard jointly with another employee; Mr Trembath. Correspondence was forwarded to all parties in response to a series of procedural matters that were raised, after the final Directions hearing. A significant amount of the material covered in the hearing was common to both Applicants accordingly it has been included in both decisions.

Relevant Legislation to the Application

[15] All parties provided submissions and a series of witness affidavits. The parties were provided with the relevant legislative provisions with the listing for the Directions hearing:

Section 385 - What is an unfair dismissal The following states:

“A person has been unfairly dismissedif FWA is satisfied that:

(a)  the person has been dismissed; and

(b)  the dismissal was harsh, unjust or unreasonable; and

(c)  the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d)  the dismissal was not a case of genuine redundancy.”

Section 389- Meaning of genuine redundancy states:

“(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.”

[16] This relevant extract of the Explanatory Memorandum which sets out clause 389 - Meaning of genuine redundancy was provided to the parties:

“Clause 389 – Meaning of genuine redundancy

1546. This clause sets out what will and will not constitute a genuine redundancy.  If a dismissal is a genuine redundancy it will not be an unfair dismissal.

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

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

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



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



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

1549.  It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.

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.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy.  However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal...”

Background

[17] The Applicant was employed as a full time employee; by the Respondent from 28 August 2007. He was employed as the Orchard Manager.

[18] Ms Rena Merchant (the Respondent), as a sole trader, operated the Kabi Organic Golf Course and Orchard. The business was comprised of three parts; an organic orchard, an organic golf course and a clubhouse.

[19] The Respondent set out that the Applicant’s position was made redundant by Ms Merchant due to a decision to close down the whole business based on the Respondent’s ill health and the business not being financially viable to continue. Dr Vivienne Taylor provided two affidavits as to Ms Merchant’s ill health. The Respondent’s accountant, Mr Offenhauser provided an affidavit detailing in particular the last 3 - 4 years of declining returns of the Respondent’s business and noting it’s financial decline since 2002.

[20] The evidence of the Respondent and the Applicant confirmed that Ms Merchant communicated to the Applicant on 28 April 2011 verbally and in writing that his position and those of 9 other employees were being made redundant. The Applicant was provided with the following letter of redundancy.

“...Further to our meeting of today I regretfully confirm that your employment with us is terminated with effect from 28th April 2011.

This is due to your position having to be made redundant, and in no way reflects your performance in your job, which has been entirely satisfactory.

Kabi Organic Golf Course will be closing its gates as of the 30^th April and consequently your services are no longer required.

This letter serves as notice of termination and any holiday entitlements will be paid out today. You will also receive 3 weeks pay in lieu of notice.

We thank you for your efforts and contribution will be happy to supply a written reference if required and wish you all the best for future endeavours...” 1

[21] The letter stipulated the anticipated date the “gates would be closed” was 30 April 2011. Later that day on 28 April 2011, the closure date was amended to 1 May 2011 to allow for a pre-booked function and to operate on a skeleton staff of green keepers.

[22] The medical evidence of Dr Taylor referred to the ongoing chronic health problems suffered by Ms Merchant; and that she had suffered this condition for a number of years and has been in “extreme ill health”, and had to avoid stress in her life.

[23] Mr Craig Offenhauser, the Respondent’s Accountant, confirmed the financial state of the Respondent’s business taken from the tax returns from 2002 - 2009 and the unaudited statements for 2010/2011 as follows:

“...Over the last 5 years, we have provided various financial analyses to the proprietor for the purpose of restructure of the business to place it on a more profitable basis, and then further advice as to the complete closure of the business due to the financial unsustainability of their operating model. The primary causes of the unsustainability of the business have been:

• its geographical position -it's distance from populated areas such as Noosa and Tewantin, and its low surrounding existing population and prospective population growth; and



• its certification as organic by definition eliminates the use of chemical pesticides and fertilisers resulting in a higher labour cost per dollar of income in comparison to traditional golf courses and orchards.

Over the last 10 years the proprietor has investigated and implemented several proposals, with the objective of establishing Kabi Organic Golf Course & Orchard as a "destination" sporting and function centre, including:

• relocating and renovating a historical building from the surrounding area, and incorporating it into the golf course club house;



• the purchase of surrounding farm land and incorporating the purchase and raising of organic cattle for commercial sale;



• the building of a restaurant cum function centre for 120-150 people to attract both business functions/conference/seminars and wedding receptions; and



• the establishment of a "Fairway Functions" website.

Over the last 3 to 4 years, we had come to the conclusion that the business was financially unsustainable and we advised the proprietor of this fact. During that time the proprietor's health deteriorated substantially and it was blatantly clear that the business could not continue. We advised her to close the business and sell the assets.

Despite her absolute determination to find a viable financial operating model for the business, her personal health could no longer take the stress and strain, and she seriously risked her own personal financial ruin.

We had several meetings with the proprietor during the months of March and April, and she advised us on the 28th April 2011 that she had decided to close the business not only due to the financial position but also her poor personal health.

Since that date, we have overseen the calculation and refund of paid membership fees to all club members. Appropriate action was taken with respect to notifications that the golf course and clubhouse were being closed immediately. We have forwarded a full analysis and details to KPMG who is assisting us in developing a plan to sell the assets...” 2

[24] In accordance with the redundancy decision; the Respondent paid all outstanding leave entitlements and payment of wages in lieu of notice to the Applicant. Further to this on 9 June 2011, the Applicant was paid the applicable severance pay. This payment of severance, occurred later, as the Accountant, subsequently calculated that the Respondent did not have less than 15 employees, due to operating a related corporate entity, the organic cattle station.

Summary of the Submissions by the Respondent and Evidence

[25] The submissions made by the Respondent contended that the Applicant’s dismissal was a result of a genuine redundancy, and, consequentially, FWA does not have jurisdiction to hear the Application. In the second instance, the Respondent contended that the Applicant’s dismissal was fair, and not harsh, unjust or unreasonable, as the Applicant’s position of employment with the Respondent, was made redundant.

[26] It was the main submission of the Respondent, with respect to s 389 (1) (a) of the Act, that the Applicant’s position of employment was made redundant, due to the Respondent’s ill-health, and the business no longer being financially viable. In support of this, the Respondent confirmed that no one was employed, to do the job previously performed by the Applicant.

[27] The Respondent submitted that, the Applicant was informed, verbally and in writing on 28 April 2011, that his employment was made redundant. As stated the reasons for this were cited as Ms Merchant’s ill health and the business suffering continued financial losses and would be closed on 30 April 2011. Later on the day, the employees were informed of the redundancy, it was submitted, the Applicant was made aware that the business would be open for an additional day due to a pre-booked event. At the same time, the Applicant was made aware of the fact a skeleton staff would be employed until such time that the business was sold. This was supported by the evidence of Mr Troy Maclaren, Course Superintendent. 3

[28] With respect to Ms Merchant’s ill health it was submitted that, according to the medical opinion of Dr Taylor, the Respondent was suffering from ongoing chronic health problems that caused her to endure severely incapacitating pain and disability, which had been occurring for a number of years. This led Dr Taylor to determine, that the Respondent was unable to continue working.

[29] With respect to the financial position of the business, it was submitted that the business was no longer financially viable according to Mr Offenhauser’s examination of the financial records. 4 This opinion, it was submitted, came as a result of continued significant financial losses, and in discussion with the Respondent in March and April 2011, the determination was made that the business could no longer be sustained. However Ms Merchant, made the final decision herself on 28 April 2011, to close the business.

[30] It was submitted that as the business was ceasing its operations, there were no positions created or alternative positions available for the Applicant. Additionally, the Respondent contended that because of this, it was not reasonable in the circumstances of the Applicant, to redeploy him within the enterprise, as it was no longer operational.

[31] With respect to s 389 (1) (b) of the Act, the Respondent submitted that the employment of the Applicant was governed by the terms of the Horticulture Award 2010 5. In regard to the obligation in a Modern Award with respect to a redundancy, the Respondent submitted that in clause 8 of the Award (set out later), there is an obligation for the Respondent to consult with the Applicant “in the event of introducing a major change that will have a significant effect”.6 It was argued these consultative provisions had been complied with.

[32] The Respondent supported this assertion, by making reference to the events of 28 April 2011 in which Ms Merchant after making a definite decision to close down the business on that morning, notified the employees of this major change to the operational requirements of the business and the significant effect of this change on their employment; therefore complying with the Award obligation. This, in addition to the Applicant’s ability to discuss the redundancy with this Respondent, it was submitted, demonstrated compliance with clause 8 of the Award.

[33] Mr Clifford argued that the Respondent had met their obligations in accordance with clause 8 “Consultation regarding major change in the workplace” of the Horticulture Award 2010. 7

[34] With regard to necessary consultation with the Applicant Mr Clifford stated, that based on the decision by the Full Bench in Ulan Coal Mine Limited v Henry Jon Howarth and others, 8 once the obligation to consult is satisfied, no further discussions are required. However Mr Clifford stated the Applicant had the benefit of a further discussion on 3 May 2011 and he had a further opportunity to raise any additional inquiries at that time.

[35] Mr Clifford submitted that the consultation was not deficient, but that the Applicant was frustrated as he missed an opportunity to profiteer from the situation. Mr Clifford emphasised that the obligation is on redeployment within the employment relationship. There was a decision made on genuine operational requirements in regard to the ill-health of Ms Merchant and the continuing operating losses across the three areas for the business, including the orchard. Ms Merchant had no obligation to transfer the operation of the orchard business to the Applicant.

[36] The evidence of Dr Taylor demonstrated that Ms Merchant’s poor health contributed to the closure of the business. The Respondent stated that the closure of the business was inevitable. Mr Offenhauser, the Respondent’s accountant, stated that he had tried to get Ms Merchant to close the business and in terms of prior knowledge of the health of the business, it was widely known by employees (as follows) that the business was losing money:

“Right. Why wasn't there earlier consultation or was there earlier consultation?

---Everybody at that - every employee knew. Graeme Shorland will verify this, and I know - and I'm sure Mr White knows this, and I know - Commissioner, I would be certain that just about everybody knew that we were under sheer financial stress, serious financial stress. Every year I would go up there and get budgets. Every year I would tell them to cut. Every year I would tell them, "We cannot continue like this. We've got to cut the expenses, cut the expenses, cut the expenses." There were salary increases or wage increases but you can't leave a person on one wage for five years and never give them an increase, for crying out loud, when the CPI is 3 per cent so I just had to deal with that because - well, you just can't do that to somebody. Everyone knew we were under sheer financial stress and for a substantial period of time - seven years, easy seven years. Everyone knew. The last four years, Ms Merchant's health was deteriorating seriously, and the main reason for that was the financial stress. Someone suggested that I probably put that stress on her because I'm worried about the financial side.

Right?---Maybe I did, but that's - I tried to get her to close that place down in 2006, 2007, 2008, 2009. "Let's sell it, let's sell it, let's sell it," because I couldn't see any way, and it was her dream, it was her determination. "No. Let's try something else, let's try something else, let's try something else," and then when your client makes that decision you have to support them in the best way you can and use your professional skills to help them achieve their goals. So was there consultation? The week before the 28th, we had continuous discussions and I made it very clear to Ms Merchant that, "We cannot continue like this, Rena. It is killing you financially and physically, and we cannot continue," and when she made the decision - because she would argue against it. She would argue against it. She was arguing against it. I was relieved that she had made the decision, and then on that day I wasn't - I was there the following day.... Originally there was only going to be two but - two greenkeepers, but then the main greenkeeper said, "Look, we can't do it on two. It's just too damn big." It's 180 acres - I think it is. 182 acres. "We can't do it." So then they got increased to four. The specific area of the orchard was we don't want fruit fly, but we've got to strip it and dump it. But there were - - -

Is that why you allowed people on to pick the fruit, for the fruit fly?---That's because if you cross that with the council you can get in a lot of trouble. So - and she also wanted to give - her attitude was, "Look, I don't want any money for it. Just give it away. Give it to charities," and she actually organised for it to be given away because she didn't want any money. She said, "Listen, just strip it off, then the trees are right. The greenkeepers can keep everything else okay, and we'll just get rid of everything." But there was no income received. The idea was to close the business down and reduce expenditure to the absolute bone.” 9

[37] The Respondent stated that significant operational requirements flowed from Ms Merchant’s decision to close the business. This decision led to an obvious reduction in staff and the duties required to be performed.

[38] Mr Offenhauser, stated the necessity to close the business as follows and that it would not have been viable to retain the orchard and therefore there was no longer a position of employment for the Applicant:

“In short, the orchard was a very small percentage of the gross income but a substantial loss to the business as a whole. On that piece of paper you have got a $40,000 loss in 11, and then you see 10 was 34 and a half thousand, 09 was nearly 29,876, 2008 was 25,351. Because of that situation it's just a minuscule part of the business as a whole from a professional viewpoint it was necessary, in my view, to close all the business, golf - the three areas, the golf course, the food and beverage and the orchard.

...

THE COMMISSIONER: The orchard. What is your assessment of that particular - I'm not sure whether that was considered. Was it considered?---The - was it considered? In closing the business, because the orchard was showing a gross profit loss - this is gross profit loss - it does not include - those losses do not include worker's compensation, insurance, share of electricity, telephone, a myriad of other expenses. It was so - look, it was not viable and therefore because it was not viable in any way, shape or form it wasn't a question whether it could be kept open or not.

...

All right. So in closing the doors, and that's a question. Are the doors closed on this business?---The doors are closed. There is no income being received from golf - fruit and - from golf, food and beverage or fruit, nothing at all, zero.

So is a buyer being sought for the business?---12 months ago, and I'm pretty sure many of the employees knew this. I could name the ones if you want me to but they knew I was actively seeking with Ms Merchant's approval a buyer because of the financial situation and because of her health situation. The person I spoke to and sent documents to was KPMG. I had a full 10-year analysis done by another chartered accountant to make it separate from my firm and those documents and everything was submitted to KPMG for analysis because of their contacts in Asia hoping to find an interested party in Asia.” 10

[39] In addition, Mr Offenhauser provided the profit and loss statements 11 of the business from 2009-2011 which showed the continuing losses of the business as a whole and of the orchard on its own. The question was put to Mr Offenhauser regarding whether the orchard could continue to operate in isolation and therefore continue the Applicant’s employment. Mr Offenhauser stated in response, that the orchard could not have been excised from the rest of the business and even if so it would have continued to make financial losses, as stated by Mr Offenhauser:

“It was all part of the total concept as well, wasn't it?---It was. It was a very small - it was a very - as I said, 6 per cent was a very small part of the whole - the main thing was the golf course and golf course fees and the hiring of the carts. That's where 70 per cent of our income came from, and if you look in net terms, it was higher than that, gross income. The food and beverage was 20, 25 per cent, but that's gross. When you take off the sales less the cost of sales it was lucky to be five so the majority of our income - we were a golf course. We were an organic golf course and that's where our - the net income - well, it was a loss. We made losses every year as you know, but that was the primary centrepiece of the business. Yes, the orchard made it look pretty but we knew it was never viable as an arm of the business. It would never make a profit.

...

THE COMMISSIONER: What would have been the financial situation? Are you expecting that the expenses recorded here would have continued? It would have continued - - -?---The expenses and the losses would have continued indefinitely, and have worsened her financial position.” 12

[40] The Applicant argued that the continued operation of the orchard was required to maintain its overall organic status on the site. Mr Maclaren provided evidence that the golf course in its entirety had organic certification not just the orchard. 13 The Applicant also questioned the recent investment by the Respondent when the business was financially troubled. Mr Offenhauser’s evidence was that the orchard could not have been operated separately or profitably in the foreseeable future. It was conceded that money was spent on the golf course prior to the closure, from a public liability perspective to ensure safety of bridges on the golf course and to maintain the business for sale.

[41] Mr Offenhauser and Mr Maclaren confirmed the Applicant’s job was not being undertaken by any remaining employee. 14 Some of the duties of tidying the orchard (of the Applicant) were being done by other employees; however the picking of the fruit was being done by an external organisation - Super Natural Organics:

“THE COMMISSIONER: The harvesting of the fruit though. That's not being done by employees, is it?---No, it's a non-working orchard as we speak. You know, we don't receive any money for it. We just look after the golf course grounds and unfortunately the orchard will - or fortunately, whatever, the orchard is a part of the golf course and needs to be tidy. So when the time does come that the property is put on the market, it gets what we can get for it, I guess. You know, rather than what used to be a golf course orchard.” 15

[42] The Respondent provided a series of case authorities in support of the Respondent having met its obligations under s 389 of the Act. The Respondent submitted that pursuant to Forster v Hanson Precast Pty Ltd, 16 a s 394 application can proceed no further if the termination of an employee’s employment was a case of genuine redundancy.

[43] The Respondent submitted that regard must also be had to Kekeris v A. Hartrodt Australia Pty Ltd, 17in which Hamberger SDP made reference to the importance of the explanatory memorandum in determining jurisdictional matters of this nature. His Honour stated:

“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.”

[44] Some of the maintenance duties, of the Applicant’s job continued in terms of tidying the orchard. This was performed by the green keepers. No other employee was undertaking his other duties in managing the orchard. Additionally, the Respondent also referred to the decision in Harding v Linbo Pty Ltd (Receivers and Managers Appointed) t/as Noosa Blue Resort, 18 as authority that if the Applicant’s position is no longer required to be performed by anyone, this can be confirmed by no one performing that role within the organisation. This was the case with the Applicant’s job after closure. Additionally, it was submitted, that on the basis of Manoor and Yatish Prasad v United Petroleum Pty Ltd;19 except where stated in a Modern Award or agreement, there is not an absolute requirement to consult with employees about a proposed redundancy. However in the current matter adequate consultation had occurred in accordance with the Modern Award.

[45] The Respondent referred to the case of Maswan v Escada Textilevertried t/as Escada 20 where Vice President Watson held:

“I have found that the reason for termination was redundancy consequent upon a restructure of the operations and the merger of two positions. If this restructure had not have occurred there would not have been a termination. This reason cannot reasonably be described as related to Mr Maswan’s capacity or conduct and hence much of the provisions related to such terminations will not be relevant to the fairness of the termination...”

[46] Similarly the reason for the Applicant’s termination was redundancy consequent upon the restructure of the operations (caused by the closure), and was unrelated to his capacity or conduct.

[47] The Respondent submitted that where there is no opportunity for redeployment or the employee does not have suitable qualifications or experience where a redundancy occurs, per Taylor v Tatiara Meat Company Pty Ltd, 21 this gives weight to instances where a redundancy is genuine. The four retained employees were skilled and qualified organic green keepers.

Summary of the Submissions by the Applicant and Evidence

[48] The submissions made by the Applicant relate to, in his determination, his “unlawful” dismissal of employment from the Respondent’s business on 28 April 2011. He stated this included a failure by the Respondent “to properly consult about the redundancy under the relevant award” and claimed a contravention of the general protections in Part 3-1 of the Act, in which it was asserted that the Applicant was selected for redundancy based on his physical disability at the time. All of the submissions made by the Applicant have been considered, however for the purpose of this decision, only his statements relating to ‘genuine redundancy’ will be outlined.

[49] In the Applicant’s submission, there was a reliance on material fact to enforce his claim that a genuine redundancy did not occur; consequently, he stated no reliance on case law was used in his submissions.

[50] The Applicant submitted that the redundancy was not genuine as the Respondent indicated an intention to remain compliant with the Australian Organic Standard as a Certified Organic Producer and therefore he considered his services and certification were required to be maintained to continue such compliance. The Applicant’s main role, it was submitted, maintained the orchard’s compliance with this standard, which he argued could not be fulfilled by the remaining staff.

[51] The Applicant submitted that it would have been logical, in all reasonable circumstances, for the Respondent to retain him in their employment for a number of reasons. Firstly, his qualifications and his broad experience as a professional horticulturalist. Secondly, there was between $20,000 and $30,000 worth of organic fruit ready for harvest, which the Applicant had established markets for. Thirdly, the Applicant had been in the initial stages of producing certified organic preserves for sale, which would have improved the figures. Fourthly, the Applicant had brought jars and designed the labels for these products and established a market to sell them. Fifthly, the Applicant submitted that, he was proficient in the use of all green keeping equipment at the business, and had been called on at times to do unsupervised work on the golf course and could have been retained for this.

[52] The Applicant submitted that the Respondent was influenced by Mr Maclaren’s opinion of him in selecting candidates from the staff for redundancy. The reasons for this, the Applicant submitted, were previous personal disputes between the Applicant and Mr Maclaren, and that his view was Mr Maclaren did not consider the Applicant’s injury was work related. Subsequently, the Applicant submitted, Mr Maclaren had exploited his temporary absence from the business (prior to the redundancy announcement) in order to “settle our personal disputes”.

[53] The Applicant made submissions with respect to the lack of consultation prior to the termination of his employment. It was the Applicant’s contention that he was not provided an opportunity, for him to state his case, as a way of retaining his employment with the business, in some capacity.

[54] The Applicant alleged that there was an attempt at consultation but given that there were alcoholic drinks being offered it was not a situation to have appropriate discussions involving potential questions of redeployment. However, the Applicant agreed that the only positions of employment available, after the business was closed were the green keeper’s positions. He agreed he did not have the qualifications commensurate with the other green keepers that had been retained, but he had the skills to undertake green keeping work. Mr Offenhauser’s evidence was that the golf course was the core business and the main profit centre.

[55] The Applicant in his ‘summary statement’ contended that the consultation was deficient in the following terms:

“I contend the circumstances of my termination did not provide a realistic opportunity to consult my employer about the redundancy under the Horticultural Award. I was the first employee in the enterprise to be dismissed by the Respondent. This was executed in the presence of all of the retained staff members. These circumstances provided no opportunity to discuss the change to the tenure of my employment, the future operation of the orchard, or possible ways to mitigate the adverse effects of the operational change to my employment status.

I contend that had such a discussion taken place, it is possible an agreement could have been reached for my registered business to harvest, sell and distribute fruit, as was offered to and accepted by Supernatural Organics, shortly after I was dismissed.

I contend the letter of redundancy the Respondent supplied exclusively to me at smoko on 28 April 2011, was in breach of the employer obligations under the Horticulture Award. The letter failed to provide in writing all relevant information regarding the nature of the changes to the orchard enterprise and the effect of these changes on my employment.

I further contend the redundancy letter was factually incorrect as it claimed the course was to be closed on 30 April 2011. The course remained open to the public on 1 May 2011. As the matter of the redundancy letters and their availability are relevant to the issue of consultation, I intend to pursue this matter in cross examination of witnesses.

At the time of my dismissal, the Respondent claimed to myself and partner Ms Kim Luff (Affidavit provided 28 July 2011), that only the two longest serving members of Kabi’s staff were to be retained. I contend the Respondent provided this information to indicate there was no possibility of me retaining a position at Kabi and therefore no point in discussing the issue. I recall after 30 April 2011, when Mr Graeme Shorland telephoned me and suggested all greenkeepers may have kept their jobs, and 1 May 2011, when Skye Davis confirmed to me her continued employment at Kabi, I considered the Respondent had been misleading when terminating my employment.

I reject the assertion that the Respondent did not have access to a management team to assist with consultation for the dismissals...

I contend the fulfillment [sic] of my tasks by a third party indicates the core responsibility of the Orchard Manager (which I believe in Kabi’s situation was to maintain certification for the entire venture to retain Council approval) was fulfilled by Supernatural, with the remainder of my record keeping and maintenance tasks, possibly being undertaken by the four qualified greenkeepers.

As stated above, I also contend the offer to Supernatural Organics of access to the Kabi orchard for commercial purposes, could have been offered to me as a way to mitigate the adverse effects of the Respondents’ decision to make my position redundant.” 22

[56] The Applicant agreed that no one person was fulfilling his job. However, he contended, that he was not properly consulted and if he had, he have may have been redeployed within the business, or may have been able to use his registered business to take-over operating the orchard.

[57] He agreed however he does not have green keeper qualifications to the standard of the 4 green keepers retained; Mr Maclaren, Mr Adam Ward, Ms Skye Davies, and Mr Brendan Scrase. That is, they had experience as organic green keepers and their qualifications were a Certificate IV in Horticulture and Turf Management.

[58] In regard to whether appropriate consultation had occurred, the Applicant argued he had a discussion on 28 April 2011 with Ms Merchant. He argued she advised him of the decision had been made to close the business and his position had been made redundant, as the orchard was no longer operational and the whole business was going to be sold. (The Applicant stated she also conveyed 2 green keepers were being retained. He later learnt it was 4). The Applicant stated in his conversation on 28 April 2011 with Ms Merchant, she referred to her significant ill-health and that she had experienced more chronic related symptoms that day and that had prompted her decision. Further he said, she stated she’d had enough and was “closing the gates” of the business.

[59] The Applicant stated that from the day he was employed; he was aware that the golf course was going to struggle financially. He also said, he saw evidence of the business in financially difficulty in the period since his employment commenced from 2007.

[60] The Applicant stated; that Ms Merchant said to him and Ms Luff (on 28 April 2011) that Mr Maclaren and Mr Scrase would be retained as green keepers. The Applicant confirmed that he and Ms Luff had the opportunity to ask questions about the closure of the business and who would be kept on.

[61] The Applicant stated Mr Shorland telephoned him on 30 April 2011 and discussed the closure of the business. The Applicant returned to the business on 4 May 2011 and at this time, he considered at the time of consultation on 28 April 2011, she had misrepresented the circumstances to him.

[62] The Applicant agreed that Ms Merchant had conveyed her decision that she was going to close the business due to her ill-health. He was also aware of the financial difficulties of the business.

Considerations

[63] The obligation to consult is not an absolute obligation to consult. The Full Bench in Ulan Coal Mine Limited v Henry Jon Howarth and others (as set out below):

“We do not consider, in the particular circumstances of the present matter and having regard to the obligation under sub-clause 23.1 of the Agreement, that a further round of discussions was required to be held by the Company with the employees to be dismissed, either separately or as a group. This does not mean that such separate discussions might not be worthwhile and appropriate e.g. as part of the consideration of measures to mitigate the adverse affects of terminations or to ensure that opportunities for other employment and assistance are properly examined. However they are not part of the discussions envisaged and required under sub-clause 23.1 of the Agreement and that is the test in these particular circumstances. In different circumstances this will of course vary according to the terms of particular awards and agreements.” 23

[64] The obligation to consult is to be discharged in accordance with the obligations in the provision of industrial instruments. The test in relation to consultation in this matter arises from clause 8 the Horticulture Award 2010, 24 set out for convenience below:

“8. Consultation regarding major workplace change

8.1 Employer to notify

(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

8.2 Employer to discuss change

(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1.

(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.”

[65] The Applicant accepted the consultation occurred as follows:

“So on that same day - so let me recap: you were informed that a decision to close the business and the orchard had been made; you were advised of the impact that that decision would have on your employment, because it was going to be terminated, because you were going to be made redundant. Yes?---Yes.” 25

[66] The evidence of Mr Maclaren demonstrated that discussions were held on the issues of the closure of the business and redeployment. The decision to close the business was made on the morning of 28 April 2011, and discussions held further that morning, the Applicant confirmed as follows:

“During that first meeting, what was discussed?---Rena's decision to close the golf course and that she was looking to keep a skeleton crew on, and unfortunately due to her health and other issues, eg financial costs of the enterprise, she had to close the course and it would be put on the market for sale when she saw fit.

Was there any other discussion? Was there an opportunity for everyone to ask questions to Ms Merchant about - - -?---Definitely. Yes, I mean, we were all shocked. You know, we sat around there a little bit dumbfounded, I suppose. I do believe we were still there - I was definitely still there when Graeme arrived, and the then Graeme the pro shop manager was informed of the decision. Then we started to talk about what needed to be done. He made us aware that there was a private function booked for the Sunday and that we could not close on that day. We had to follow up on that, so then the decision was made to tell the members, "Go ahead with this function," basically sort out what we needed to sort out prior to the actual closing.

During these conversation, people had an opportunity to discuss with Ms Merchant the nature and the reasons for her decision, and in fact Ms Merchant even proffered some of that information?---Yes. Correct.” 26

[67] The Applicant accepted that discussions occurred and he had a one on one consultation with Ms Merchant:

“MR CLIFFORD: So not only you had the opportunity to ask questions, but also your partner, I'm assuming Ms Luff is? She also had the opportunity to ask Ms Merchant questions about - - -?---She did.

...

I'll come back to that. You've just admitted there was consultation but you're saying that there wasn't consultation - - -?---It was an attempt at consultation, yes. I'll concede that. There was an attempt at consultation.

...

That's different to what you were saying before, because you were saying there was an opportunity to - you answered the question yes, if I recall correctly - that you did have the opportunity to ask questions?---Yes, I said there was an attempt at consultation.” 27

[68] Further Mr Maclaren provided evidence that he attended the meeting on 28 April 2011, with Ms Merchant and that staff were told of the decision and changes to the operations:

“During these conversation, people had an opportunity to discuss with Ms Merchant the nature and the reasons for her decision, and in fact Ms Merchant even proffered some of that information?---Yes. Correct.” 28

[69] The Applicant had an opportunity to the discuss redundancy with Ms Merchant; the consultation was adequate. In accordance with the decision in Ulan Coal Mines Limited v Honeysett and other  29 clause 8 of the Award does not require individual consultation.

[70] In terms of the issue of possible redeployment of the Applicant, the Respondent referred to Ulan Coal Mines Limited v Honeysett and other. 30 In this decision the Full Bench said as follows at paragraph 28;

“...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 role, 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...”

Further at paragraph 34 the Full Bench said as follows;

“It may be appropriate to make some concluding remarks about the operation of s.389(2). It is an essential part of the concept of redeployment under s.389(2) that a redundant employee be placed into another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard...” 31

[71] The nature of the qualifications and experience held by the Applicant are important to determining the issue of redeployment. The only positions available were those of the required organic green keepers, with appropriate qualifications. The Applicant conceded he did not hold the equivalent skill or qualifications, therefore it was reasonable that the Applicant was not redeployed in these positions.

[72] The Respondent alleged that the Applicant was not seeking reinstatement or redeployment. The Respondent contended that the Applicant’s Application was a ‘money grab’; that he had sought to ‘profiteer’, that is not to have his job back but to have his registered business, be given the opportunity to conduct the business of the orchard, instead of Super Natural Organics and to sell the orchard fruit himself, as evidenced by:

“MR WHITE: That's right. If I had have been consulted and Ms Rena Merchant had have said to me, "The 20-odd tonnes of fruit that's sitting on the trees at the moment, you can have it because I don't want it," I had a registered business, I had access to employees, I could have harvested - I had access to markets.” 32

[73] The Respondent had no obligation to provide him with the operational rights to the business. The question of redeployment is only in an alternative position of employment within the business. The Applicant in his closing arguments referred to the figures demonstrating the business’s financial losses. The Applicant contended the wage figures provided exacerbated the losses. He stated the sale of the fruit crop would have alleviated the orchard’s losses. He conceded it was not viable as a wholesale fruit orchard, but value adding to the product he was developing, may have reduced the losses or possibly made it viable.

However Mr Offenhauser stated that this was not viable as even if the orchard was retained; the orchard income receipts were only approximately 6 per cent of the total gross income receipts of the business.

[74] The Applicant understood that Ms Merchant had no legal obligation to offer him the opportunity to take over the orchard. However, he stated given she was aware of his financial situation; based on her knowledge of providing him with documentation 12 months earlier so he could refinance his family home, this should have been considered. Further, the Applicant stated the timing of the decision to close the business and the issue of which employees were to be retained were not factually correctly conveyed to him or his partner Ms Luff, by Ms Merchant. It was confirmed by the Respondent and in the evidence of Mr Offenehauser, that the golf course could not be maintained by two green keepers.

[75] In contrast to the Applicant’s evidence, Mr Maclaren stated the Applicant knew that morning, that four green keepers were being retained.

“MR WHITE: Mr MacLaren, firstly I'd like to cover events of 28 April 2011, which was the day the respondent made the decision to close the golf course. I refer to paragraph 5 page 1 of your 14 September witness affidavit, where you state on 28 April the respondent informed you of her decision to close the course. Do you recall what time of the day it was that the respondent informed you that she would be closing the course that day?---It was early in the morning... 33

“In your material, you also - your evidence, sorry, you also mentioned that you overheard a conversation between Mr White and Ms Merchant. During that conversation you say that words were put into the mouth of Ms Merchant that only two greenkeepers would be kept?---That's my opinion, and that's what I believe was - because Ms Luff over here was questioning Rena on which crew were kept on, and quite confrontal, actually, to tell you the truth which made my ear prick up a little bit more.” 34

[76] Ms Luff was not called by the Respondent for cross-examination on her statement and therefore the Applicant reasonably objected to the Respondent endeavouring to critique her evidence, when it was open to them to call her.

[77] However at paragraph [5] of Mr Maclaren’s statement and [242-246] of the transcript it is confirmed that the Applicant was informed in the morning of 28 April 2011 of the closure of the business. The Applicant contended this occurred, as the parties commenced farewell drinks; (although he and Ms Luff did not) and he understood at that time only 2 green keepers were being retained and he did not clearly understand that Super Natural Organics were to pick the fruit in the orchard. The Applicant said the serving of alcohol stymied the proper consultation and his absence from the “drinking,” prevented him from learning about the retained employees.

[78] The Applicant suggested that who was retained after the closure was based on ‘different agendas’ and that on this basis he stated Mr Maclaren tried to show he was separated from the decision making. The Applicant stated that at the time he was dismissed, Mr Maclaren (in correspondence to Workcover) considered the Applicant was misleading the Respondent, as to the actual nature of his injury and that this had influenced the decision not to continue his employment. There was no evidentiary basis that the Applicant’s redundancy was based on any alternative reason to that provided to the Applicant.

Conclusion

[79] The Applicant in the proceedings, was clearly as committed to the success of the organic orchard; as Ms Merchant was to the business.

[80] The decision to close the business was based on Ms Merchant’s continued ill-health and the long-term losses from the business. Ms Merchant had resisted the counsel of her accountant for as long as possible; trying many endeavours to maintain her aspirations for this unique business.

[81] On the morning she made the decision; the Applicant conveyed that Ms Merchant had relayed her worsening health situation to him. A conversation had occurred with him regarding her decision to close the business, due to her deteriorating health and the financial position.

[82] Whilst the Applicant maintained he was mislead regarding the number of green keepers to be retained in the skeleton crew, to maintain the business for sale; it is irrelevant as he conceded that he did not hold the equivalent skills or qualifications to these green keepers.

[83] Arising from the decision to close the business, the employer, due to the change in operational requirements, no longer required the Applicant’s job to be performed by anyone. There was no evidence; that the Respondent could have reasonably redeployed the Applicant within the business or an associated entity. The Orchard Manager was not required at the related corporate entity - the organic cattle station - nor did he argue such. He did argue that he could have taken over the orchard, conducting it via his separate business; in lieu of Super Natural Organics who were given the fruit with no monetary return required to the Respondent. Whilst it was open to the Applicant to argue such; there was no obligation arising from the employment relationship, the statutory or Award provisions to provide this.

[84] The Respondent had also met the obligations to consult arising from clause 8 the Modern Award. The employer made a definite decision on 28 April 2011 to close the business and communicated it to the Applicant that morning. On the evidence, the letter containing the decision (that his job was being made redundant) was also provided to him that day.

[85] Whilst the Applicant did not participate in the farewell drinks provided by the Respondent, he was not prejudiced because of this. The drinks were obviously welcomed by the employees for their work in the business. The Applicant had the opportunity for a further, later discussion with Ms Merchant

[86] The Applicant’s dismissal was a case of genuine redundancy as the Applicant conceded that no one was performing his job; and that the Respondent no longer required the Applicant’s job to be performed due to the changed operational requirements of the employer’s enterprise.

[87] In addition as set out, the Respondent has complied with the obligation for consultation under the Modern Award. Further, in accordance with ss 389(2)(a) and (b) there were no redeployment options available to the Applicant.

[88] Accordingly, the Applicant’s dismissal is a case of genuine redundancy pursuant to s 389. Therefore (in line with s 385) it cannot be determined that the Applicant was unfairly dismissed. For all of the aforementioned reasons; the application is jurisdictionally barred; as the termination was a genuine redundancy. The application made pursuant to s 394 is therefore dismissed. I Order accordingly.

COMMISSIONER

 1   Termination Letter.

 2   Witness Affidavit of Mr Craig Offenhauser, Annexure 1.

 3   Witness Affidavit of Mr Troy Maclaren, [5-9].

 4   Witness Affidavit of Mr Craig Offenhauser, [5].

 5   [MA000028].

 6   Horticulture Award 2010 [MA000028], clause 8.

 7   [MA000028].

 8   Ulan Coal Mine Limited v Henry Jon Howarth and others[2010] FWAFB 3488.

 9   Transcript 16 November 2011 PN170-172.

 10   Transcript 16 November 2011 PN92; 95; 147-148.

 11   Witness Affidavit of Mr Craig Offenhauser, Annexure 1.

 12   Transcript 16 November 2011 PN171 and PN115; 141.

 13   Transcript 16 November 2011 PN262.

 14   Transcript 16 November 2011, PN138 and PN280.

 15   Transcript 16 November 2011 PN172 and PN280.

 16   Harrison, SDP, [2010] FWA 5393.

 17   [2010] FWA 674, [27].

 18   [2010] FWA 6125.

 19   Smith, C, [2010] FWA 2571.

 20   [2011] FWA 4239.

 21   Steel, C, [2010] FWA 5150.

 22   Applicant’s Summary Statement.

 23   [2010] FWAFB 3488, [31].

 24   [MA000028].

 25   Transcript 16 November 2011 PN670.

 26   Transcript 16 November 2011 PN411 - PN413.

 27   Transcript 16 November 2011 PN720, PN686 and PN737.

 28   Transcript 16 November 2011 PN413.

 29   [2010] FWAFB 7578, [38].

 30   [2010] FWAFB 7578.

 31   [2010] FWAFB 7578, as cited by Simpson C in Wilson v North Rockhampton Bowls Club Inc[2011] FWA 1928, [83-84].

 32   Transcript 16 November 2011 PN600.

 33   Transcript 16 November 2011 PN242.

 34   Transcript 16 November 2011 PN414.

<Price code C, PR517414>