Mr David Joseph v Amandon Pty Ltd T/A World Business Travel
[2013] FWCFB 8539
•11 NOVEMBER 2013
[2013] FWCFB 8539 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Amandon Pty Ltd T/A World Business Travel
(C2013/5372)
VICE PRESIDENT WATSON | |
COMMISSIONER ROBERTS | |
COMMISSIONER BULL | SYDNEY, 11 NOVEMBER 2013 |
Appeal against decision PR538772 of Deputy President Booth at Sydney on 9 July 2013 in matter number U2013/429 - natural justice - evidence from the bar table - opportunity to respond - genuine redundancy - job no longer required - consultation obligations - award coverage - consultation - Fair Work Act 2009 ss 385, 389, 396, 400.
Introduction
[1] This decision concerns an application for permission to appeal against a decision and order 1 made by Deputy President Booth in relation to an application by David Joseph for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). The application arose from the termination of Mr Joseph’s employment by Amandon Pty Ltd T/A World Business Travel (Amandon).
[2] The Deputy President was required to determine a preliminary issue in the application, namely, whether the termination was for reasons of redundancy and whether the termination fell within the definition of genuine redundancy in s.389 of the Act. After a hearing that took approximately half a day, the Deputy President issued her decision orally and it is recorded in the transcript of proceedings. The Deputy President concluded that Mr Joseph’s employment was terminated on account of a genuine redundancy because the termination of employment occurred for business reasons associated with a general downturn in the business, and no consultation obligation was breached because no award applied to his employment.
[3] The Deputy President went on to say that in any event she would have found it difficult to conclude that Amandon failed completely in its consultation and further that she did not believe that the termination was harsh, unjust or unreasonable. The Deputy President issued an order dismissing Mr Joseph’s application later that day.
[4] At the hearing of the appeal on 29 October 2013, Mr Joseph represented himself and Mr R Amaral, the Managing Director of Amandon, represented the company.
Background
[5] Amandon is Corporate Travel Consulting Business with 7 full time employees and 1 part time employee.
[6] The nature of business that Amandon conducts is to provide travel management assistance for corporate business. It effectively sells the travel bookings and receives a fee or commission on sales.
[7] Mr Joseph commenced employment at Amandon on 11 April 2011 in a role titled ‘Corporate Travel Consultant’ and was promoted to ‘Supervisor’ in May 2011. In this role, Mr Joseph was responsible for making travel bookings and supervising other Travel Consultants who were engaged in taking and making telephone and internet travel related bookings for the company’s corporate clients.
[8] In late November 2012, Mr Amaral engaged in meetings with an external business advisor, seeking operational and financial advice in light of a shift in the market that had resulted in a loss of clients for Amandon. The business advisor reviewed the operational structure of Amandon and suggested to Mr Amaral that the position of Supervisor was no longer required and should be made redundant.
[9] On 17 January 2013, Mr Amaral provided Mr Joseph with a new job description titled ‘Senior Consultant/Supervisor’, and informed Mr Joseph that he would like to have a meeting to discuss the content of the job description as he was aware that many of the duties listed in the description had been delegated to other staff members by Mr Joseph.
[10] On 22 January 2013, Mr Amaral held a meeting with Mr Joseph. In that meeting the parties discussed the job description, and Mr Amaral questioned Mr Joseph as to why duties in his job description had been delegated to other staff members. Mr Amaral requested that these tasks were not to be delegated to other team members as the tasks in question fell within the description of Mr Joseph’s role as Supervisor. The meeting became a heated exchange and ended acrimoniously. Mr Joseph did not return to work for 2 days.
[11] When Mr Joseph returned to the office on 24 January 2013, Mr Amaral informed Mr Joseph that the position of Supervisor had been made redundant. Mr Amaral provided Mr Joseph with a letter of termination expressing the reason for termination as redundancy due to a downturn of work.
The Decision under Appeal
[12] The Deputy President handed down an oral decision in transcript followed by an Order to dismiss Mr Joseph’s application, shortly after the completion of the hearing of the matter. We note that in the original proceedings the parties represented themselves and provided limited assistance to the Commission on several of the legal issues that needed to be determined.
[13] The Deputy President’s initial task was to consider whether the termination was a genuine redundancy under the Act. Pursuant to s.385 of the Act a dismissal that is a case of genuine redundancy cannot be an unfair dismissal. The definition of genuine redundancy in s.389 of the Act contains two elements and an exception. It provides as follows:
“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.”
[14] As to the first element of the definition the Deputy President said: 2
“I think the circumstances in this matter are analogous to those of the Ulan Coal Mines decision. The evidence is that there was a down turn in the business of World Business Travel. The evidence is that the labour costs were a large proportion of the expense budget of the business and that in particular the position that was made redundant was around 20 per cent of the labour costs, so a rather large proportion. The evidence is that the duties performed in the position were redistributed, in part to Mr Amaral and in part to travel consultants and it is not contested that no one has been appointed to fill the position that was made redundant. In my view the test of whether 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 is met.”
[15] As to the second element of the definition the Deputy President said: 3
“Whilst I cannot be certain without further research it is my on balance view that this award would not apply to Mr Joseph and that the supervisory role is the principal purpose and the principal purpose is to supervise travel consultants, and although travel consultants would perform some clerical duties in the conduct of their business that is not their principal purpose. They are there to take bookings, to make bookings, to arrange itinerates, to effectively manage the smooth passage of employees and others, of their clients in their domestic and international travel and that the Clerks Private Sector Award is intended to cover people whose specific occupation is that of a clerical nature.”
[16] The Deputy President said further: 4
“The opportunity was given and as the Gretley Coal Mine decision makes clear, it is providing an opportunity. Having said that, I think better practice would have been, Mr Amaral, to provide another opportunity on a later occasion for a thorough conversation with Mr Joseph about the thinking and reasoning behind your decision and you could have provided him with an opportunity to make some alternative suggestions, albeit the business coach's advice was no doubt both professional and comprehensive, the purpose of consultation is to see whether or not the particular familiarity that an employee possesses of their role can help inform an employer making a decision. So I think better practice would have been to spend more time in the process of discussion, but I would find it difficult to conclude, even if I did think that the Clerks Private Sector Award applied, I would find it difficult to conclude that Business World Travel failed completely in their consultation, although it is line ball to be honest and if I hadn't concluded that the Clerks Award didn't apply and the provision was therefore definitely an obligation upon you, further and better consideration of the matter may yield a different decision because it is certainly the case that it was a short meeting and the decision having been made it was Mr Joseph's evidence, and I accept it, that he didn't believe that he had an opportunity to undo a decision that had been made.”
[17] In relation to the exception the Deputy President said: 5
“I also need to consider if briefly the last legislation of the provision of section 385 which is the question of whether or not it would have been reasonable in the circumstances for the person to be redeployed within the employer's enterprise or the enterprise and associated entity award. Clearly there are no associated entities that were relevant. Mr Joseph didn't press the question of redeployment but Mr Fernandez's evidence was quite compelling to the effect that all consideration of redeployment was given, so alterative positions, reducing hours, reducing pay, changing roles was considered and that in that circumstance it would not be reasonable for Mr Joseph to be redeployed within the business.”
[18] The Deputy President also said that she did not believe that the termination was harsh, unjust or unreasonable in any event.
The Grounds of Appeal
[19] Mr Joseph advanced the following grounds of appeal:
● Denial of procedural fairness. Mr Joseph submits that he was denied procedural fairness as he was not provided with the opportunity to respond to Mr Amarals final submissions. Mr Joseph further submits that points raised in Mr Amarals final submissions should have required Mr Amaral to give evidence by way of witness examination and that the Deputy President formulated her decision based on points made in Mr Amarals submissions in respect of which Mr Joseph was denied the opportunity to respond.
● Errors regarding specific findings of fact. Mr Joseph submits that the Deputy President erred in her findings of fact based on Mr Amaral in his final submissions. The findings of fact that Mr Joseph submits the Deputy President erred on are findings that Amandon had performance and behavioural issues with Mr Joseph and that Mr Joseph had been consulted in relation to any genuine redundancy.
● Witness Credibility. Mr Joseph claims that Amandon’s witness, Mr P Thomas, the Sales Director at Amandon, was not a credible witness and should not have been allowed to give evidence for Amandon. This claim is made on the basis that the witness made several errors of fact relating to clients that the business had lost, and that the opinion that he had expressed about consultant capacity was inconsistent with an opinion put forward by the ‘Business Coach’, Mr Fernandez. Finally, Mr Joseph claims that a comment made by Mr Thomas in cross examination, that his memory was ‘not as good as it used to be’ was not properly taken into account.
Permission to Appeal
[20] Section 400 of the Act limits the grounds on which permission to appeal can be granted in unfair dismissal matters to cases where Fair Work Commission considers it in the public interest to grant permission to appeal. This criterion has been described as follows: 6
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ and Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210].
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
[21] We propose to consider whether permission to appeal should be granted in the context of the grounds of appeal.
The Procedure adopted in the matter
[22] We note that the Deputy President, gave Mr Amaral the option of giving his evidence from the witness box or from the bar table. He chose the latter - and in his submissions made various statements of fact for the first time regarding the circumstances of the termination. He did not tender the witness statement he had prepared but made statements along similar lines in the course of his evidence from the bar table. Immediately after Mr Amaral completed his submissions the Deputy President asked him some questions relating to the facts and circumstances he had covered. At 2.13pm she said that she would adjourn for a short time to consider whether she could issue her decision that day. At 2.20 she returned and delivered her oral decision.
[23] In our view this procedure denied Mr Joseph the opportunity to test and challenge the evidence given by Mr Amaral from the bar table. For that reason, in the appeal proceedings we gave leave to Mr Joseph to give further evidence about the facts and circumstances covered in Mr Amaral’s evidence. He responded to Mr Amaral’s evidence and tendered Mr Amarel’s witness statement. He was then cross-examined by Mr Amaral. In our view this opportunity should have been provided to Mr Joseph by the Deputy President prior to issuing her decision. Because of this procedural irregularity we grant permission to appeal and propose to take the additional evidence into account in determining the substantive matters that arise in this appeal.
Operational requirements
[24] Insofar as the grounds of appeal challenge the stated reason for termination as redundancy we dismiss those grounds. In our view the evidence clearly establishes that Mr Joseph’s job was eliminated and that a restructure of jobs in view of the economic circumstances was central to the decision to terminate his employment. The personal conflict that existed between Mr Amaral and Mr Joseph was part of the context but in our view the Deputy President correctly concluded that it did not alter the operational reason for the termination of Mr Joseph’s employment and the first element of the test of genuine redundancy in s.389(1)(a) was satisfied.
Consultation obligation
[25] We turn to consider whether the second element of the test, found in s.389(1)(b), was satisfied. The first question that arises in this regard is whether an obligation to consult about the impending redundancy existed. This in turn depends on whether Mr Joseph was covered by an award, as uniform consultation obligations exist in all modern awards. As we have said, the parties provided very limited assistance to the Deputy President on this question.
[26] During the award modernisation process, attention was given to award coverage in the travel industry. The award modernisation Full Bench said: 7
“[223] We have decided not to make a modern award for the travel industry. The only pre-reform award is the Travel Industry–Agencies General Award 1999. 8 That award apparently has quite limited coverage. It seems likely that employees of travel agencies and employees performing similar functions in other industries are presently covered by pre-reform awards and NAPSAs which apply on an industry or occupational basis. In the modern award system they would appropriately be covered by industry awards such as the General Retail Industry Award 2010 or the Clerks Modern Award. At this stage we see no need to extend the terms of the pre-reform award to a very large number of employers and employees who have never been covered by them.”
[27] In subsequent proceedings the Australian Services Union sought specific classifications for travel industry staff in the Clerks - Private Sector Award. In a decision handed down on 14 November 2012 Senior Deputy President Kaufman rejected the application 9. In the course of his decision, his Honour noted that the employers did not contest the coverage of travel agents by either the General Retail Award or the Clerks - Private Sector Award but said that the question of which award applies is a question of fact to be determined at the time an issue arises for determination.
[28] We note the broad description of the retail industry in the coverage and definitions clause of the General Retail Industry Award 2010 (General Retail Award). In our view the work of a travel consultancy in selling and making travel bookings on behalf of clients falls within the description of the retail industry because it involves selling goods and services to final consumers for personal or business consumption. Further, we are of the view that the broad classifications in that award extend to the travel consultants and Mr Joseph as a supervisor and a person required to perform similar duties as well as supervise their work was also covered by that award. We also are of the view that the Clerks (Private Sector) Award 2010 covers the substantial clerical nature of the work of travel consultants and their supervisor, although the most appropriate award to the business of Amandon is the General Retail Award because of the nature of the employer’s business and the priority given to the General Retail Industry Award in the coverage clause of the Clerks - Private Sector Award. In any event if either award applied, a consultation obligation arose from the standard provisions of modern awards.
[29] It follows from this conclusion that Amandon was under an obligation to consult with Mr Joseph. The obligation in the award is expressed as follows: 10
“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 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.”
Did the requisite consultation occur?
[30] In considering this question we have had regard to the evidence before the Deputy President and the supplementary evidence given by Mr Joseph in the appeal. On the basis of that evidence we are not satisfied that Mr Amaral consulted with Mr Joseph about his decision to make Mr Joseph redundant. It is clear to us that Mr Amaral did not raise the matter with Mr Joseph at the meeting on 22 January. His evidence was that he intended to raise it but the meeting ended before he had the opportunity. Raising the revised job description may have been a precursor to consultation of the more fundamental decision, but he simply did not get to that point. If, as he suggested, he intended to raise the matter but because the discussions about revised job descriptions led to an acrimonious and abrupt end to the meeting, he still had the obligation to engage in the necessary consultation in an appropriate manner and had every opportunity to do that in a subsequent meeting with Mr Joseph. On the basis of the totality of the evidence we are satisfied that no further efforts at consultation occurred until the letter of termination was given to Mr Joseph on his return to work on 24 January.
[31] It follows from this conclusion that the second element of the definition of genuine redundancy in s.389 of the Act is not satisfied and the conclusion of the Deputy President in this regard cannot stand. We add that we have no reason to doubt the conclusions of the Deputy President in relation to a consideration of alternative positions in the exception to the definition of genuine redundancy.
Disposition of the Appeal
[32] As detailed above we grant permission to appeal because the procedure adopted by the Deputy President denied Mr Joseph an important opportunity to respond to evidence given from the bar table against his case. Further, contrary to the Deputy President’s conclusions, we find that Amandon had an obligation to consult with Mr Joseph about an impending decision to terminate his employment arising from changes to the size of its workforce and it failed to do so.
[33] The conclusion we have reached is confined to the issue of whether the termination of Mr Joseph was a case of genuine redundancy. Pursuant to s.396 of the Act this matter was required to be decided before considering the merits of the matter. As the Deputy President noted, this does not mean that the termination was unfair. That is a separate question which should be determined with the benefit of the conclusions we have reached on the preliminary issue and after giving the parties an opportunity to make any further submissions.
[34] We allow the appeal, quash the decision of Deputy President Booth and refer the matter to Commissioner Roberts to determine the outstanding issue of whether the termination of Mr Joseph’s employment was nevertheless harsh, unjust or unreasonable.
VICE PRESIDENT WATSON
Appearances:
Mr D Joseph appearing on his own behalf.
Mr R Amaral on behalf of Amandon Pty Ltd T/A World Business Travel.Hearing details:
2013.
Sydney.
October.
29.
1 Handed down in Transcript and Order on 9 July 2013.
2 Transcript of 9 July at PN496.
3 Ibid PN500.
4 Ibid PN514.
5 Ibid PN 518.
6 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343.
7 Award Modernisation, [2009] AIRCFB 450.
8 AP799612CRV.
9 [2012] FWA 9731.
10 MA000004.
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