Mr Ayman Michael v Transfield Services (Australia) Pty Ltd

[2014] FWC 8739

[2014] FWC 8739

FAIR WORK COMMISSION

DECISION

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

Mr Ayman Michael
v
Transfield Services (Australia) Pty Ltd
(U2014/8370)

DEPUTY PRESIDENT SAMS SYDNEY, 4 DECEMBER 2014

Termination of employment - contract to Department of Defence - whether employee genuinely redundant - consultation with affected employees - selection process - offers of redeployment - terms of enterprise agreement - whether dismissal ‘harsh, unjust or unreasonable’ - employer met all its obligations to redundant employee - case of genuine redundancy - Commission has no jurisdiction - application dismissed.

[1] Mr Ayman Michael (the ‘applicant’) was employed by Transfield Services (Australia) Pty Ltd (the ‘respondent’ or ‘Transfield’) as a C7 (Trade) Electronic Technician, working on Transfield’s Land Materiel Maintenance contract (LMM) at the Department of Defence’s Moorebank facility. The applicant commenced employment with Transfield on 9 September 2013, although he had worked at the facility for a previous contractor to the Department of Defence (the ‘Department’) for some 6 ½ years.

[2] On 27 May 2014, Transfield was given formal notice by the Department that it was reducing its funding of the electronic trade maintenance service delivered by the LMM Moorebank. As a result, 6 of the 12 existing C7 Electronic Technician positions were to be made redundant on 1 July 2014. After a period of consultation and attempts by the respondent to identify redeployment opportunities (the genuineness of which was contested by the applicant), four of the affected employees were ultimately made redundant on 27 June 2014; the applicant obviously being one of the four.

[3] On 17 July 2014, the applicant filed an application, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’) seeking a remedy from what he claimed was his unfair dismissal by the respondent. He relied on the definitions of unfair dismissal and genuine redundancy found at ss 385 and 389 of the Act respectively as follows:

‘385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

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

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

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

...

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] Relevantly, s 396 of the Act states:

‘396 Initial matters to be considered before merits

The FWC 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.’

[5] Notwithstanding the provisions of s 396 above, there will often be an overlap in the merits of an unfair dismissal application and considerations of whether a termination of employment is a case of genuine redundancy. So it was in this case with the applicant arguing that the respondent’s failure to properly consult with him in accordance with the consultation provisions in the Agreement and its failure to genuinely consider redeployment options for him, constituted grounds of unfairness, or more correctly, matters going to whether his dismissal was ‘harsh, unreasonable or unjust’. However, for the reasons to which I will shortly refer, it is unnecessary for the Commission to travel beyond a preliminary finding as to the genuineness of the applicant’s redundancy.

[6] Unsurprisingly, the respondent strongly contested the applicant’s claim that his dismissal was not a case of genuine redundancy. In its letter to the applicant, dated 30 May 2014, the following passages are important:

‘As discussed with you, local management of the Company’s Department of Defence - Land Materiel Maintenance (LMM) contract have been issued a direction in accordance with the Contract’s Workforce Requirement Requisition to effect changes to overall resource delivery at the LMM facility, Moorebank. Specifically, these changes will effect current EIR service delivery, and will result in a 50% reduction of existing C7 (Electronic Technician) trade personnel required from 01 July 2014.

As a consequence of these changes, I confirm that the duties you have been carrying out in your positions as C7 tradesperson, reporting to JLU Manager Andrew Foster will no longer be required beyond 27 June 2014; hence, your position will be terminated based on reasons of a genuine redundancy applying. In accordance with sub-clause 19.2.1 of the LMM Enterprise Agreement 2013-2016, the applicable 4-week period regarding notice of termination is effective from Friday, 30 May 2014, with your last working day being Friday, 27 June 2014. In this case, the Company requires that you will work out the applicable 4-week notice period.

At this state of the process there are no redeployment opportunities within your skill-set available however during your notice period, the Company will continue to search for alternative employment opportunities that may exist at other LMM sites or elsewhere within the Company. Your Manager will keep you informed of these actions.

[7] The reference to the Agreement in para [6] above is to the Transfield Services Greenfields LMM Enterprise Agreement 2013-2016 [AE401695](the ‘Agreement’). The relevant clauses are cl 9 - Introduction of Change and cl 19 - Redundancy. Both clauses are reproduced in full as Annexures A and B respectively to this decision. Two issues directly affecting the applicant may be immediately distilled from these provisions. Firstly, the applicant was required to work out his notice of four weeks and, secondly, the applicant received no redundancy payments as he had not completed one year’s service with Transfield (I note that this also applied to all the other redundant employees who had the same service).

[8] I shall come back later to the broader concepts of consultation and redeployment arising from the evidence in the proceeding. While there had been an earlier attempt at conciliating a settlement of the matter, I also undertook a private conference with the parties at the outset of the hearing. That conference ultimately proved unsuccessful and the matter proceeded to arbitration. The applicant was represented by a friend, Mr D Magin and the respondent was represented by its Industrial Relations Manager, Mr D Dal Bon. Written and oral evidence was provided by the applicant and his direct manager, Mr Andrew Foster.

THE EVIDENCE

Mr Andrew Foster

[9] Mr Foster is the Manager, Joint Logistics Unit (East) - Land Materiel Maintenance contract for the respondent. In written evidence, he said he was informed on 27 May 2014 that the Department intended to reduce funding for the C7 (Trade) Electronic Technician work stream (the ‘C7 Group’), meaning that six of the twelve roles in that stream would become redundant at the Moorebank facility. He conceded that he had been discussing possibilities by which redundancies could be mitigated, prior to this announcement. This had included the development of selection criteria to be applied to the affected employees, based on the work that was to be required in the future and weightings applied to each category based on the Department’s proposed future requirements.

[10] Mr Foster said that he used this selection criteria to assess the C7 Group by way of reference to individual employee qualifications and personnel records. Mr Greg Richards (Scheduler), Mr Saxon Fiori (Team Leader) were involved to assure the accuracy of the process.

[11] Mr Foster stated that on 29 May 2014, the C7 Group was informed by Mr Michael Binns, Site Supervisor, of the intention of the Department. Mr Binns provided employees with a document headed ‘Notification of Intended Changes’, which set out the reasons for the changes and the actions the respondent intended to take to mitigate their effects. The applicant was present at this meeting and an Organiser from the Australian Manufacturing Workers’ Union (AMWU or the ‘Union’) was also present. Mr Michael, along with five other employees were issued a termination letter on 30 May 2014 (see para [6]).

[12] Mr Foster deposed that he had engaged in a lengthy consultative process with the applicant and the other affected employees. He noted he had had a meeting with the applicant on 2 June 2014, and on several subsequent occasions, to discuss the outcome of the Company’s assessments. He had provided a list of available jobs within the wider Transfield business to the affected employees and had dealt directly with other State Managers to find alternative employment opportunities within the LMM business unit. Two interstate LMM positions were found and one of the affected employees successfully applied for one of these roles. Another fitter’s role at the Moorebank site was filled by one of the affected group. It was offered to that one employee only, as the others in the group did not possess the relevant qualifications. Three of the employees were terminated on the grounds of genuine redundancy at the end of the four week notice period and one served an extended notice period and ceased employment on 25 July 2014.

[13] Mr Foster said that training had been offered to the affected employees in relation to preparing resumes and interview techniques, but the applicant did not take up this offer. When the applicant complained as to the selection process, an external review was conducted on 23 June 2014. The review confirmed the selection process findings.

[14] In cross examination, Mr Foster acknowledged that he had not documented details of the Group meetings with the affected employees as there were multiple witnesses as to what was said. Each employee had been provided with an email setting out the job descriptions for the remaining roles. These were the same as the former roles. This represented a ‘base level’ for someone to be employed in that role. The Australian Defence Force had then assessed which of the relevant employees was better skilled in terms of civilian qualifications and/or defence training.

[15] Mr Foster was referred to an email sent to another employee, which referred to ‘defence specific qualifications that relate to the equipment that will continue to be funded by the Commonwealth’. He clarified that the equipment being worked on onsite had not changed, but the manner in which it was worked on had changed. The employees who remained had the relevant qualifications and the others did not.

[16] Mr Foster agreed that a number of the affected employees had requested to see the selection criteria. He had ‘walked’ the employees through a 38 point selection criteria so they understood their position in relation to each criteria. There were some redacted elements. These criteria were a mixture of objective components relating to qualifications and subjective assessment derived from information gathered from a number of people who had known the employees over a period of time. He could not recall the exact times he had had spent in meetings with individual employees, but he had spent a significant amount of time with them. He denied that he had failed to respond to any queries put to him.

[17] Mr Foster explained that the military qualifications were not listed in the position descriptions. The Department would limit the amount of training on classified pieces of equipment. He agreed that there were a number of employees who were qualified to work on certain equipment and another group who could work on that equipment, if supervised by an employee of the other group. However, the equipment on which the applicant had been qualified to work on and his role in ‘signing off’ on other employees’ work, was no longer being maintained. Mr Foster emphasised that the employees were made aware of what equipment was to be maintained, but written references to some equipment was restricted as commercial-in-confidence, top secret or bound by security clauses in the Departmental manual.

[18] Mr Foster said that the two interstate roles which were presented to the six affected employees were in Bandiana and Puckapunyal, Victoria. The position in Puckapunyal was not accepted by any of the employees. Only one of the employees held the relevant qualifications to work in the General Engineering division at Moorebank, specifically as a Cert III Electrical Fitter. That redeployment opportunity was therefore not offered to the others. Training was offered to the specific employee over the course of one week, on the basis of their existing qualifications. The level of qualifications necessary for this position was set by the Department.

[19] Mr Foster acknowledged that a spreadsheet provided to the affected employees setting out vacant positions within the Transfield Group described some positions that had already been filled. This was because Transfield was a large company and he was unable to halt recruitment entirely for the purposes of the redeployment of the affected employees. It was really an issue of a cross over in timing.

[20] Mr Foster emphasised that no decision had been made to reduce the numbers of employees by six, prior to the announcement on 29 May 2014 by Transfield, though there had been earlier second hand ‘whispers’ from persons in the Department.

[21] Mr Foster said that the one employee given an extended notice period had been briefly retained to temporarily fill the role of someone who had also been temporarily redeployed to Darwin. The employee granted the extended notice period was the next person on the basis of the assessment on the selection criteria. He believed that this was a pragmatic and fair approach.

[22] Mr Foster conceded that he had not provided the affected employees with individual copies of their assessment under the selection criteria. This was because the document he ‘walked’ them through on the computer, had personal information relating to other employees. He noted that the meeting he had had with the applicant in relation to his concerns, was over two hours in duration.

[23] Mr Foster acknowledged that the applicant was not happy with the selection process. As a result, he had made an equal opportunity complaint to the HR department in accordance with Transfield’s policies. A decision was made to deal with the complaint internally. Mr Foster had remained separate to that process, as he had been involved in the initial selection.

[24] Mr Foster agreed that Mr Fiori had been involved in the selection process, despite Mr Fiori’s denial of this to the applicant. Mr Foster had agreed to keep Mr Fiori’s feedback confidential as Mr Fiori still needed to work with the affected employees in the workplace. In any event, Mr Foster said that he was not required to give the applicant a list of people who had provided information relevant to the selection criteria, which included Mr Binns and Mr Richards. He had not been aware of any issues between the applicant and Mr Richards or any complaints in relation to Mr Richards’ conduct, until after the affected employees were made redundant.

[25] In answer to a question from me, Mr Foster said that the applicant ranked eighth or ninth after the initial selection process was completed.

The applicant

[26] In written evidence, the applicant claimed that there were opportunities available within Transfield’s enterprise which were not offered to him. He agreed there was an opportunity for work in Victoria which had been presented to the six affected employees. This was filled by one of the employees (‘Jay’). An opportunity to work in the General Electric [sic] division at Moorebank had been presented to another employee (‘Gilbert’) only. Additionally, another employee (‘Thuy’) was provided with work up until 25 July 2014 at Moorebank.

[27] The applicant tendered an email dated 10 June 2014 sent to Ms Steel and Ms Fortescue of Transfield, setting out his request for a review under the Equal Employment Opportunity policy of what he believed was an unfair decision to terminate his employment. He claimed that he had received training which two of the C7 Group who had remained working for Transfield had not received, and that he had trained, supervised and ‘signed off’ on the work of those two employees. He also asserted that he had longer experience working for Departmental contracts and he had higher qualifications. He complained that Mr Fiori, his Team Leader, had not been consulted as to his assessment. Mr Foster’s decision was tainted by the feedback of Mr Richards, who had a history of discrimination against him dating back to 2008.

[28] In cross examination, the applicant accepted that he had attended a meeting on Thursday 29 May 2014 with the C7 Group at which he was notified by management of the intended changes at Moorebank, which had been initiated by the Department and which would result in a 50% reduction in the C7 Group. He had been given a letter on the same day setting out these changes. The applicant agreed that his employment had been covered by the Agreement and that the Agreement covered the Union, an Organiser of which was present at the meeting on 29 May 2014.

[29] The applicant was referred to the termination letter given to him on 30 May 2014 (see para [6]), which he acknowledged referred to redeployment opportunities. He conceded that he had talked to Mr Foster, or a member of his management team, about these redeployment opportunities and that the opportunities in Bandiana and Puckapunyal had been made available to him. The HR team had also made itself available to discuss alternative roles in Sydney and help with resume preparation and interview skills; although he had not taken up these offers. He had not made enquiries about alternative employment within Transfield outside of his nominal skill set.

[30] The applicant had not previously been aware that the colleague who had been moved to the General Engineering division at Moorebank had a Certificate III trade qualification as an Electrical Fitter. He was aware that he had previously worked in the General Engineering division.

SUBMISSIONS

For the respondent

[31] In written submissions, the respondent outlined the history of the applicant’s employment with Transfield and the circumstances of his termination. These arose due to the direction received from the Department to make changes in its service delivery at the Moorebank site. This required a 50% reduction within the C7 Group from 1 July 2014. The applicant was one of six employees subsequently identified as surplus to operational requirements. Two of these six employees were redeployed. Throughout the four weeks leading up to 1 July 2014, the respondent was involved in consultative processes with the affected employees. They were also offered help with resume writing and interview techniques. The applicant’s employment was terminated on the grounds of genuine redundancy. Accordingly, there was no jurisdiction for the Commission to consider the merits of the application.

[32] In oral submissions, Mr Dal Bon suggested that the applicant was particularly aggrieved about the consultation prior to his dismissal. This did not mean that the respondent had failed to meet its obligation to consult with the applicant in circumstances of genuine redundancy. The respondent had acted fairly and consistently in implementing the redundancies.

For the applicant

[33] In written submissions, the applicant put that there had been no consultation prior to his dismissal. Nor had alternatives to redundancy been properly contemplated or initiated. The respondent had not acted in good faith and its decision was engineered by its management which had deliberately relied on ‘discretionary choices’. The applicant had not been given appropriate information that would allow him to question the fairness or validity of the respondent’s decision. Accordingly, it could not be said the applicant’s position was genuinely redundant.

[34] The applicant submitted that it was a question of fact as to whether employees selected for redundancy were chosen for a reason related to the operational requirements of the employer, or some other reason. It was suggested that the applicant’s capacity, if not conduct, played a part in the respondent’s decision not to redeploy him elsewhere. The applicant could not understand why more junior employees were still working for the respondent and believed that Transfield had taken on one of the employees who had been made redundant, although this role had not been offered to him.

[35] The applicant claimed that he had been discriminated against on the basis of his non-membership of a Union. He had been told by Transfield to obtain the relevant Job Description and Selection Criteria from the Union, but it had refused to deal with him, as he was not a Union member.

[36] The applicant said that his dismissal was ‘harsh, unjust and unreasonable’ in that there was no valid reason for his dismissal and that he had not been notified of any reason or given an opportunity to respond.

[37] In oral submissions, Mr Magin, in referring to the Agreement, put that the respondent had not complied with its obligations to provide all relevant information to the affected employees. The applicant had been denied access to hard copies of documents which were said to reflect what the applicant’s position in the selection assessment actually was.

[38] Mr Magin clarified that the reference to the employee who had been ‘taken on’ after the redundancies, was a reference to the employee who had had his notice extended (see para [34].

[39] While Mr Magin claimed that the applicant had been told that he could receive information about the selection criteria and the Job Description from the Union, he had not been told how he could otherwise obtain it.

CONSIDERATION

The legislation applicable to this case

[40] S 389 of the Act requires the Commission to consider three matters as to whether a particular dismissal is a case of genuine redundancy. These are that:

(a) the person’s employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment of the person to consult about the redundancy; and
(c) a person’s dismissal will not have been 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 that of an associated entity of the employer.

In the event that one or more of these matters are not satisfied then the person’s dismissal (assuming no other jurisdictional hurdle) can proceed to hearing as to its merits.

Was the applicant’s job no longer required to be performed by anyone because of the operational requirements of the employer’s enterprise (s 389(1)(a))?

[41] This first question might be said to involve the conventional and long held definition of what constitutes a redundancy. In Hawkins v Commonwealth Bank of Australia [No 2] (1996) 70 IR 213, a Full Bench of the Australian Industrial Relations Court said:

‘The learned trial judge held that Mr Hawkins was in a redundancy situation in mid-1993. In doing so it was first necessary to resolve a difficulty in the construction of cl (c)(iii) which reads:

“(iii)‘Redundancy’ means a position where work (or a major portion of it):

(1) is no longer required to be performed;
(2) is to be performed at a new location which requires a change in residence of the officer concerned; or
(3) results from re-organisation; changed business practice; technological change; downturn in business; a decision to reduce the number of officers; or a general reduction in classification levels or positions.”

Read literally the definition makes little apparent sense. His Honour accepted the submission of the Bank that the clause should be construed by treating par (3) as a concluding paragraph of general application to each of pars (1) and (2). This involves ignoring the structure of the definition and, in particular, the semi-colon and “or” at the conclusion of par (2) and the separate numbering of par (3). His Honour observed that redundancy has an accepted meaning as describing a situation that might lead to termination of an employee's employment because the duties of a job or position are no longer to be performed by an employee as the occupant of that job or position and often as a result of technological or organisational change: see Short v F W Hercus Pty Ltd  (1993) 40 FCR 511 at 520-521; Quality Bakers of Australia Ltd v Goulding  (1995) 60 IR 327 and Jones v Department of Energy and Minerals  (1995) 60 IR 304 . His Honour said that it is consistent with the ordinary meaning of redundancy to treat par (1) as reflecting that meaning, par (2) as an extension of it, and par (3) as identifying the circumstances in which a redundancy arises which attracts the operation of the agreement. The appellants now accept that this is the proper way in which cl (c)(iii) should be construed.’

[42] In Foster’s Group Ltd v Wing (2005) 148 IR 224, Habersberger AJA (with whom Maxwell P and Nettle JA of the Victorian Court of Appeal agreed), distilled the meaning of redundancy from a number of authorities as follows:

’33. A clear guide to the meaning of redundancy is to be found in the judgment of the Full Court of the Supreme Court of South Australia in R v Industrial Commission (SA); Ex parte Adelaide Milk Supply Co-operative Ltd.In that case Bray CJ said that:

“ … the concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him but because the employer no longer wishes the job the employee has been doing to be done by anyone. ”

Bright J expressed a similar view:

“The word ‘redundant’ does not occur in the Act. In its industrial sense it is not defined in the Oxford Dictionary. The application which I have already set out attempts a definition for the purpose of the proposed award. A consideration of the cases leads me to think that the question of the redundancy of an employee is linked to the question of the continued utility of the job which he is performing. In other words it does not relate to the personal competence of the employee in the job which he is performing. If I am right in this, then in its widest form the concept of redundancy connotes that an employee becomes redundant whenever (and for whatever reason) his employer no longer desires to have performed the job which that employee was doing. ”

34. The meaning of redundancy was recently considered by the Full Court of the Federal Court of Australia in Dibb v Commissioner of Taxation (Cth).That case arose out of a private ruling by the Commissioner concerning the tax liability of Mr Dibb in respect of a lump sum settlement received by him following the termination of his employment as a district manager with a finance company. One of the issues was whether Mr Dibb's dismissal was by reason of his bona fide redundancy within the meaning of s 27F of the Income Tax Assessment Act 1936  (Cth). In a joint judgment, Spender, Dowsett and Allsop JJ referred to Adelaide Milk and continued:

“34 We note also the observations of Ryan J in Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308 as follows:

‘However, it is within the employer's prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to single position and distributing them among the holders of other positions, including newly-created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved. One illustration of it occurs where the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Co-operative case.

“35 Similarly in Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332-333 Beazley J said:

‘There was no dispute that the “operational requirements” of a business may include redundancy. A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed.; or where the employer wishes to amalgamate jobs. … As was said in Bunnetts'  case (Bunnett v Henderson's Federal Spring Works Pty Ltd (1989) 31 AILR 354:

“Organisational restructuring may result in a position being abolished and the functions or some of them being given to another or split amongst others.

“36 The Macquarie Dictionary (3rd ed, 1997) now relevantly defines ‘redundant’ as meaning:

‘ … denoting or relating to an employee who is or becomes superfluous to the needs of the employer …

“37 In the Oxford English Dictionary (2nd ed, 1991) the word is defined relevantly as:

‘The condition of having more staff in an organisation than is necessary. Hence, the state or fact of losing a job because there is no further work to be done; a case of unemployment due to reorganisation, mechanization, loss of orders, etc.

35. Their Honours contrasted the position adopted by the Commissioner and the primary Judge with the approach espoused by the South Australian Full Court in Adelaide Milk, which necessitated “identification of the ‘jobs’ in question”.Their Honours continued:

“41 In Jones Ryan J observed that a job involves ‘a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer's organisation, to a particular employee’. We accept that view. Ryan J then observed that where such duties are reassigned, the question is whether any function or duty remains to be performed by the employee. We do not understand his Honour to have meant that if any aspect of the employee's duties is still to be performed by somebody, he or she cannot be redundant. His Honour's meaning appears clearly from the following paragraphs at 308-309:

‘In this case, the respondent led evidence that of the major changes which were made to the Department between September 1993 and late 1994. According to Mr Downie, the applicant's former position as Director, Mining Inspectorate, was abolished and the duties attached to it were combined with those of the previous Director, Environmental Management. In addition to a number of other, newly-created functions, those pre-existing duties were to be performed by a newly created General Manager, Mineral Operations. Thus it is clear that although some of the tasks previously assigned to Mr Jones still had to be carried out, the employer's rearrangement of its operational structure had the consequence that they be combined with other functions and performed by the holder of a new, more generally-oriented position.

On this basis, it appears that Mr Jones' former position was rendered “generally redundant”. When it became apparent that he could not be redeployed, Mr Jones was found to be surplus to the respondent's personnel needs. This amounted to a reason for dismissal which was clearly based on his employer's operational requirements.

“42 As Beazley J observed in Quality Bakers:

‘A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed; or where the employer wishes to amalgamate jobs …

“43 The difficulty in this case has been caused by the aphorism which appears in both paras 12 and 42 of TD 94/12 to the effect that the job, not the employee, becomes redundant. However s 27F speaks of the ‘bona fide redundancy of the taxpayer’. We consider that it is more accurate to say that an employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by any employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant. Reallocation of duties within an organisation will often lead the employer to consider whether an employee, previously employed to perform specific functions assigned to a particular ‘job’, will be able to perform any available ‘job’ existing after such reallocation. Even if the employee's job, defined by reference to its duties, has disappeared, he or she may be able to perform some other available job to the satisfaction of the employer. In that case, no question of redundancy arises. It is only if the employer considers that there is no available job for which the employee is suited, and that he or she must therefore be dismissed, that the question of redundancy arises. If, in good faith, the employer:

• has reallocated duties;



• considers that the employee is not suitable to perform any available job, defined by reference to those reallocated duties, existing after the re-allocation; and



• for that reason, dismisses the employee.

then, for the purposes of s 27F, the employee is dismissed by reason of his or her bona fide redundancy. In the above discussion we have used the word ‘available’ as meaning ‘vacant’, and the word ‘suitable’ as meaning ‘within the employee's capacity’. ”

36. It seems to me that the approach followed in Adelaide Milk has been reflected in the wording of Foster's policy. The critical question is whether through no fault of the employee his or her role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists.’

[43] Their Honours then posed the following question:

‘The critical question is whether through no fault of the employee his or her role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists.’

[44] More recently, Hatcher VP, said in Low v Menzies Group of Companies[2014] FWC 7829 at para 16:

‘[16] The second submission is not relevant to my consideration. It is not the function of the Commission, in determining whether a dismissal is a case of genuine redundancy, to form a view about the merits of the decision to make a position redundant. Whether it was objectively fair or justifiable to decide to abolish a position is beside the point, as long as the employer acted as it did because of changes in its operational requirements.’

[45] His Honour’s comments echo the words of the Explanatory Memorandum to the Fair Work Bill 2009 in the following relevant respects:

‘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.’

[46] In my opinion, there can be no quibble with the proposition that the applicant’s position was no longer required because of the operational directive of the Department that funding would not be provided for six of the existing twelve Electronic Technician positions. Strictly speaking, of course, the applicant’s position did not disappear, it was simply that the respondent could not maintain half of its electronic technicians workforce. On one view, the respondent had no choice about the matter and was forced - no doubt by contractual terms - to comply with the Department’s directive.

[47] Given these circumstances, it cannot be seriously put (nor was it suggested) that the applicant’s position was no longer required. The situation is akin to an employer reorganising or restructuring its workforce by requiring fewer employees to perform the same work as before, resulting in the redundancy of some of them.

[48] Accordingly, I am satisfied that the first limb of s 389 of the Act has been made out.

Has Transfield complied with its obligations in the Agreement to consult about the redundancy (s 389(1)(b))?

[49] The Agreement’s consultation provisions mandate that the respondent is required to take the following steps:

(a) Commence consultation as soon as a definite decision has been made; and
(b) Provide, in writing, to the affected employees all relevant information going to:

(i) the nature of the changes proposed;
(ii) the expected effect of the changes on the employees; and
(iii) any other matters likely to affect employees.

[50] Given the nature of the defence contract with the Department, I note the respondent is not required to disclose materials classified as commercial-in-confidence, in confidence or confidential.

What is the meaning of ‘consult’ as it applies in this case?

[51] Although in a slightly different context, the meaning of the word ‘consult’ was considered by a Full Bench of the Commission in Consultation Clause in Modern Awards [2013] FWCFB 10165. There, the Full Bench said at paras [28]-[32]:

‘[28] The obligation in s.145A(1)(a) is ‘to consult [with] employees’. In this context the word ‘consult’ is used as a verb and is defined in the Oxford Dictionary in these terms:

“Consult with. To take counsel with; to seek advice from.”

[29] The definition in the Macquarie Dictionary (5th Edition) is in similar terms:

“1. To seek counsel from; ask advice of. 2. to refer to for information. 3. to have regard for (a person’s interest, convenience, etc.) in making plans. - v.i 4. (sometimes fol. by with) to consider or deliberate; take counsel; confer [L. Deliberate, take counsel]”

[30] The word ‘consult’ means more than the mere exchange of information. As Young J said in Dixon v Roy:

“The word ‘consult’ means more than one party telling another party what it is that he or she is going to do. The word involves at the very least the giving of information by one party, the response to that information by the other party, and the consideration by the first party of that response.” [citations omitted]

[31] The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality. Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):

“... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.

To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation. ...”

[32] We respectfully adopt his Honour’s observations. Similar to the obligation to accord a person procedural fairness, the precise content of an obligation to consult will depend on the context. The extent and significance of a proposed change, in terms of its impact on the affected employees, will have a bearing on the extent of the opportunity to be provided. Hence a change of limited duration to meet unexpected circumstances may mean that the opportunity for affected employees to express their views may be more limited than would be the case in circumstances where the proposed change is significant and permanent. It is also relevant to note that while the right to be consulted is a substantive right, it does not confer a power of veto. Consultation does not amount to joint decision making [footnotes omitted].’

[52] Unsurprisingly, there is often argument as to the extent, nature or quality of information which must be provided to comply with the consultation procedures of an Agreement. Nevertheless, it must be emphasised that these are invariably minimum requirements with employers often having different approaches to the extent of consultation. It must also be stressed, however, that these general provisions do not mean that consultation must be to the complete satisfaction of a Union or employee/s. So long as the respondent meets its general obligations, it will usually be found to have satisfied the meaning of the consultative provisions. So it is in this case.

[53] The evidence of Mr Foster, which was not contradicted, and which I accept, was:

(a) On 27 May 2014, the respondent received formal notice from the Department of its new Electronic Technician requirements. Two days later, the C7 Group attended a meeting with Mr Michael Binns, Site Supervisor and an Organiser from the AMWU, Mr Tom Adderley, to discuss the reduction of 50% in the workforce and the reasons for it. Each employee was given a letter (see para [11] above. This demonstrates that the respondent provided the relevant information, in writing, to the affected employees and met with the employees as soon as practicable in a very short time after a definite decision had been made.

(b) Specifically in respect to the applicant, Mr Foster held a meeting with him (for some two hours) on 2 June 2014. At this meeting, the applicant was provided with details about the 38 point selection procedure, which the respondent had determined for the retention of 6 of the affected employees. All employees were told the job description did not change.

(c) All employees were shown the criteria for their selection or non-selection and ‘walked’ through the process. For privacy reasons, they were not shown other employees’ results. Mr Michael was ranked 8th or 9th out of 12.

(d) Throughout this period, up until 27 June 2014, Mr Foster made himself available to all employees to discuss the impact of redundancy and redeployment options.

(e) The applicant was offered assistance in resume preparation and interview skills. However, he declined the offer.

(f) The applicant’s last day of employment was 27 June 2014.

[54] In my view, no fault or flaw can be identified in the process of consultation with the applicant. Moreover, the applicant did not dispute Mr Foster’s evidence as to the extent of the consultative process. The fact that the applicant then and now, strongly contests his selection does not mean the process per se was unfair, biased or carried out contrary to the spirit and letter of ccl 9 and 19 of the Agreement.

[55] However, in the applicant’s case, the process of consultation went even further. Unhappy with his initial non-selection, the applicant made a complaint and sought an internal review of the decision. That review was conducted on 23 June 2014. Mr Foster was deliberately not involved. It was conducted by four management personnel and involved both subjective and objective assessments. The review confirmed the outcome of the respondent’s initial selection process. While the applicant is critical of the fact that he did not receive the reasons for the review’s conclusions, this is not a sufficient basis to conclude that it and the initial selection outcome was unfair. I hazard a guess the applicant would not be satisfied by any review outcome, unless it found entirely in his favour and reversed the initial decision.

[56] A few other points, raised in the proceeding about the initial selection process, require comment:

(a) All of the 12 employees had the same period of service with the respondent; so seniority was not a factor in the selection.

(b) The respondent looked at the defence skills of all the employees and the applicant fared poorly on these indicators. All employees knew what defence equipment was no longer to be worked on.

(c) The applicant claimed his non Union membership was a factor in his non-selection. Given that all six of the unsuccessfully selected employees were non-Union members, the claim of discrimination on these grounds is a little difficult to fathom.

(d) Mr Magin criticised the meetings held between the applicant and Mr Foster. He put that there were no notes or record of these meetings and they were unstructured. It must be remembered that this was not a disciplinary process, where notes and record of outcomes might be said to be relevant, if not necessary. These were informal discussions to discuss the process and redeployment options. Moreover, given that the criticism was never raised at the time, it can be safely assumed Mr Michael took no issue with the lack of documentation of these meetings. In any event, this criticism is of little moment.

(e) Mr Magin raised a concern with Mr Richards’ involvement in the selection process, given that he and the applicant had certain issues between them. Mr Foster’s evidence was that the applicant had never made a complaint about Mr Richards until now and he had not been previously aware of any issues or complaints about Mr Richards. There was no substantive foundation to the claim that the selection process was flawed or tainted by Mr Richards’ involvement. The selection process was on a 38 point criteria using analysis with subjective and objective factors. It involved a number of managers and applicant’s Team Leader, Mr Saxon Fiori. I do not accept that Mr Richards’ participation was such as to call into question the validity of the outcome.

(f) Mr Magin questioned Mr Foster about the circumstances applying to another employee, who was made redundant at the same time, Mr George Attard (who Mr Magin was also intending to represent in his unfair dismissal proceeding listed in the following week). Mr Magin put that a number of employees (including Mr Attard) had made complaints about Mr Richards going to health and safety issues. During the proceeding, Mr Magin’s questions were vague and non-specific. In any event, there was no evidence that the applicant in this case had made any complaints about Mr Richards. While acknowledging that Mr Magin is not legally trained, the circumstances applying to another employee, in a separate proceeding before the Commission, are irrelevant to Mr Michael’s case. The manner in which Mr Magin sought to raise this issue, through untendered emails and vague, unsubstantiated generalisations, was entirely unhelpful.

(g) Mr Magin also criticised the respondent’s decision to extend one redundant employees’ notice for a further four weeks, presumably because Mr Michael should have been given the same opportunity. Mr Foster explained the unusual circumstances of the arrangement which resulted in the four week notice extension (see para [21]) I consider Mr Magin’s criticism in this respect to be misconceived and disingenuous. In any event, the extended employee was still made redundant after a further four weeks.

[57] For the reasons stated above, I am satisfied that the second limb of s 389 of the Act has been met.

Would it have been reasonable, in all the circumstances, to redeploy the applicant to the site or somewhere else in the employer’s enterprise (s 389(2))?

[58] Given that two of the six non-selected employees were found alternative employment, one in Bandiana, Victoria and one as a Fitter at the Moorebank site, it could not possibly be asserted that the employer was paying ‘lip service’ to identifying genuine redeployment options for the affected employees.

[59] Mr Foster’s evidence, which I accept, was that he attempted to find suitable alternative employment for the affected employees by providing a list of available jobs within the Australia-wide Transfield Group. He consulted with other state managers about vacant positions. Two positions, one at Bandinia and one at Puckapunyal were identified. Both were offered to the affected employees. One was taken up; the other was not. The fitter’s role at Moorebank could only be offered to one of the six employees who had the requisite qualifications. The applicant did not have fitter qualifications, despite it being argued by Mr Magin that he should have been offered the position. Cleaning positions were also identified as being available. While I can entirely understand why a person at Mr Michael’s level and with his experience would not want a cleaning position or be transferred interstate, it does not mean that the respondent was not genuinely trying to find alternative positions for the displaced employees. I am satisfied that its efforts in this respect were genuine and wide ranging.

[60] I note that Mr Michael did not apply for any vacant positions within the wider Transfield organisation outside his level of skills, experience and qualifications. There is no doubt that the applicant had the necessary skills to perform the work of those who remained as Electronic Technicians. But this is not the point. There was simply not enough work to go round. He reluctantly conceded, in oral evidence, that he had been consulted about redeployment options. He could not identify any other positions, for which he was suitably qualified and experienced, to which he should have been redeployed.

[61] In terms of the statutory language, I am satisfied that it would not have been reasonable in all the circumstances for the applicant to be redeployed to the respondent’s enterprise or to an associated entity of the respondent.

[62] In my view, the respondent took a number of genuine steps to avoid, minimise and mitigate the adverse effects of the redundancy of the applicant. It follows that the respondent complied with cl 19 of the Agreement.

[63] In summary, I find that the respondent has met all its obligations to the applicant under the Agreement in respect to his redundancy on 27 June 2014. Each limb of s 389 of the Act has been complied with. It follows that the applicant’s dismissal was a case of genuine redundancy and the Commission has no jurisdiction to determine his unfair dismissal application as to its merits.

[64] Given these conclusions, it is unnecessary to make any findings as to whether the applicant’s dismissal was ‘harsh, unreasonable or unjust’ within the meaning of s 387 of the Act. The application must be dismissed. An order to that effect will be issued contemporaneously with this decision.

DEPUTY PRESIDENT

Appearances:

Mr D Magin for the applicant.

Mr D Dal Bon for the respondent

Hearing details:

2014:

Sydney

7 November.

Printed by authority of the Commonwealth Government Printer

<Price code G, PR558587>

Annexure A

9. INTRODUCTION OF CHANGE

9.1 Notification of Intended Changes

9.1.1 Where the Company has made a definite decision to implement changes in production, programming, organisation, structure or technology that is likely to have significant effects on employees, the Company will as soon as practicable notify the employees who may be affected by the proposed changes and the Union.

9.1.2 “Significant Effects” include termination of employment; major changes in the composition, operation or size of the Company’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 the Agreement makes provision for alteration of any of the matters referred to in this para an alteration will be deemed not to have significant effect.

9.2 Consultation with Employees and their Union.

9.2.1 The Company will discuss with the employees affected and the Union among other things, the introduction of the changes referred to in para 9.1.1, the effects the changes are likely to have on employees, measures to avert or mitigate the adverse effects of such changes on employees and will give prompt consideration to matters raised by the employees and/or the Union in relation to the changes.

9.2.2 The discussions will commence as early as practicable after a definite decision has been made by the Company to make the changes referred to in para 9.1.1.

9.2.3 For the purposes of such discussion, the Company will provide in writing to the employees concerned and the Union, all relevant information about the changes including the nature of the changes proposed; the expected effects of changes on employees and any other matters likely to affect employees provided that the Company will not be required to disclose materials classified as commercial in confidence or any other confidential information.

9.2.4 An employee may be represented in consultations under this clause consistent with sub-clause 11.3 of this Agreement.

Annexure B

19. REDUNDANCY

19.1 Discussions before Terminations

19.1.1 Where the Company has made a definite decision that it no longer wishes the job an employee has been doing done by anyone and that decision may lead to termination of employment (i.e. “redundancy”), the Company will have discussions as soon as practicable with the employees directly affected and with their Union. Discussions will cover, among other things, the reasons for the proposed terminations, measures to avoid or minimise the terminations, and measures to mitigate the adverse effects of any terminations on the employees concerned.

19.2.1 For the purposes of discussion the Company will as soon as practicable provide in writing to the employees concerned and their Union all relevant information about the proposed terminations including the reasons for the proposed terminations, the number and categories of employees likely to be affected, and the number of workers normally employed and the period over which the terminations are likely to be carried. Provided that the Company will not be required to disclose confidential information.

19.2 Payment upon Redundancy

19.2.1 Should it be necessary for a job to be made redundant during the life of the Agreement and the Company is unable to redeploy an employee into similar work, or train the affected employee for another job within its business, that employee will be entitled to the following severance payments to a maximum of 75 weeks’ pay:

• Three (3) weeks’ pay for each year of service; and



• One (1) week’s pay for each completed four (4) calendar months thereafter.

In addition, the employee will receive four (4) weeks’ notice or payment in lieu. Where the individual is over forty five (45) years of age and has completed at least two (2) years of continuous service an additional one (1) week’s notice or payment in lieu will be paid. Such notice payments will be made in substitution for those otherwise payable under Clause 18.

19.3 Employee Leaving During Notice

An employee who receives notice under para 19.2.1 may terminate his or her employment during the period of that notice. In such a case, the employee:

• will be entitled to the same benefits and payments under this clause as if he or she had remained with the Company until the expiry of such notice; but

• will not be entitled to payment for that proportion of the period of notice not worked, except at the discretion of the Company.

19.4 Time Off During Notice Period

During the period of notice of termination given by the Company, an employee will be allowed up to one day’s time off without loss of pay during each week of notice for the purpose of seeking other employment.

If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee will, at the request of the company, be required to produce proof of attendance at an interview or he or she will not receive payment for the time absent. For this purpose a statutory declaration will be sufficient.

19.5 Written Notice

The Company will, as soon as practicable but prior to the termination of the employee’s employment, give to the employee a written notice containing among other things, the following:

• The date and time of the proposed termination of the employee’s employment.

• Details of the monetary entitlements of the employee upon the termination of employment including the manner and method by which those entitlements have been calculated.

• Advice as to the entitlement of the employee to assistance from the Company, including time off without loss of pay in seeking other employment, or arranging training or retraining for future employment.

• Advice as to the entitlements of the employee should they terminate their employment during the period of notice.