Mr Elton Bizzaca v Westelect Services Pty Ltd T/A Westelect Services
[2018] FWC 4842
•17 AUGUST 2018
| [2018] FWC 4842 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Elton Bizzaca
v
Westelect Services Pty Ltd T/A Westelect Services
(U2018/5275)
DEPUTY PRESIDENT BEAUMONT | PERTH, 17 AUGUST 2018 |
Genuine redundancy – redeployment – whether sham redundancy – operational requirements – no obligation to consult.
[1] Mr Elton Bizzaca (Mr Bizzaca), the former Human Resources and OHS Manager (HR/OHS Manager) of Westelect Services Pty Ltd T/A Westelect Services (Westelect), made an application to the Fair Work Commission (the Commission) on 22 May 2018 for a remedy in respect of his dismissal (the Application). Westelect said that it had dismissed Mr Bizzaca by way of genuine redundancy and therefore the Commission had no jurisdiction to deal with his claim. Mr Bizzaca held a contrary view.
[2] The first limb of Mr Bizzaca’s case was that there was not a genuine redundancy because he had not been consulted as was required under the Westelect Services Pty Ltd Employee Collective Agreement 2009 1(Westelect Agreement), and there was no reasonable attempt to redeploy him.
[3] The second limb was that Mr Bizzaca’s dismissal had arisen because of the falling out between him and his Managing Director, Mr Adrian Cunningham (Mr Cunningham). In or around February 2018, Mr Bizzaca said that he met with Mr Cunningham to inform him that Westelect staff, including the Operations Director, Mr Kingsley Morcombe (Mr Morcombe), had become increasingly worried about Mr Cunningham’s erratic behaviour and the financial status of the business. By all accounts, the relationship between Mr Cunningham and Mr Morcombe had apparently become toxic.
[4] In 2018, Mr Bizzaca said he was approached by Mr Morcombe to buy out the shares of Mr Cunningham. The share sale did not eventuate and instead of receiving requested information regarding the share sale from Mr Cunningham, Mr Bizzaca received a redundancy letter on 3 May 2018.
[5] The Fair Work Act 2009 (Cth) (the Act) sets out that a person has been unfairly dismissed if the Commission is satisfied that, amongst other matters, the dismissal was not a case of genuine redundancy. 2 A dismissal is by way of genuine redundancy if:
● 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
● the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy; 3 and
● it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or that of an enterprise of an associated entity. 4
[6] Based on the evidence before me, which was uncontested, I have found that Westelect’s financial position was significantly compromised and had been on the decline for several years. At its largest and most profitable Westelect’s workforce consisted of 50 employees occupying full-time and casual positions. 5 However, come November 2017 there were nine employees and the next month the headcount dropped to eight. The economic viability of Westelect appeared to be in question and there was a need to drop corporate overheads expeditiously.
[7] Westelect’s Profit and Loss Statement for the period of June 2016, June 2017 and forecasted for June 2018 showed the following losses respectively -$165,358.48, -$134,760.84 and -$71,393.55. 6 In June 2018 there was no payment of dividends made to Mr Morcombe or Mr Cunningham, noting that Mr Cunningham did not draw a salary from Westelect but usually received dividends. In June 2017 the total payment of dividends amounted to $40,600.00 to Mr Cunningham and Mr Morcombe. In 2017, it was identified that Westelect was in debt to the Australian Taxation Office (ATO) in the amount of $876,934.86 and at the time of writing was subject to an ATO repayment plan of $30,000.00 per month. In March 2018, the repayment for that month was $150,000.00.
[8] Westelect said that there were no longer work duties to properly occupy a full-time HR/OHS Manager and that the functions of that role were easily absorbed by other staff, namely Mr Cunningham. I have found that Westelect no longer required the position of HR/OHS Manager due to changes in its operational requirements. While I am left with little doubt that the antagonism between Mr Bizzaca and Mr Cunningham clearly shows the demise of that relationship and the potential for incendiary, I am unconvinced that Mr Bizzaca has made out the second limb of his argument.
[9] Although Mr Bizzaca held the view that the Westelect Agreement applied to him, I have found that it did not and will traverse why later in this decision. Therefore, there was no obligation to consult under an enterprise agreement or for that matter a modern award.
[10] Mr Bizzaca advanced that it would have been reasonable in all the circumstances to have redeployed him, particularly as he was a qualified Electrician. I have found that this was not the case. I have considered the steps taken by Mr Cunningham 7, which unsurprisingly were limited given the limited number of positions within the business.
[11] Mr Bizzaca made specific reference to the vacant positions of HV Mobile Plant Electrician required for site work at a mine that had been posted on Seek on 1 June 2018. It was accepted by the parties that Westelect had been attempting to recruit for these positions for some time with a view to placing trade qualified and experienced personnel on a client’s mine site.
[12] Westelect submitted Mr Bizzaca did not possess the requisite skills for the position. Mr Cunningham’s evidence was to the effect that Mr Bizzaca did not meet the client’s requirements having not worked on mobile plant. Mr Bizzaca conceded that he would require training to do the job.
[13] The requirement for further training does not in and of itself mean that it would not have been reasonable in all the circumstances to redeploy. The exclusion in s 389(2) poses a hypothetical question which must be answered by reference to all the relevant circumstances. 8 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.9
[14] In the circumstances of this case the position of HV Mobile Plant Electrician was not a suitable position. In drawing this conclusion, I have had particular regard to Westelect being a small business employer which was facing a grave financial situation, and at a minimum, retraining was required for Mr Bizzaca to be placed in the position. The extent of that retraining was not traversed in evidence. But, it was purported that Mr Bizzaca lacked mobile plant experience. Therefore, I remain firm in my view that it would not have been reasonable for a small business employer in the circumstances such as those described to have had to redeploy Mr Bizzaca into the aforementioned role.
[15] Whether it would have been reasonable in all the circumstances to redeploy Mr Bizzaca, I make the following observations. The financial situation of Westelect was grave. Over the course of the last 7 months, three employees had been made redundant. The business was focused on cutting corporate overheads, making payments to the ATO regarding its tax liability and ensuring that employees engaged in the business generated revenue.
[16] In or around 2009, Mr Bizzaca had approached Westelect and requested to work in Perth rather than on site due to personal reasons. This request was accommodated by Westelect and Mr Bizzaca thereafter was employed in at least three different, albeit similar, office positions in the Perth office. On occasions he worked on site. Westelect previously saw fit to make changes in its operations to accommodate Mr Bizzaca. However, the evidence showed that the operational requirements of the business had now changed and in light of this it would not have been reasonable in all the circumstances for Mr Bizzaca to have been redeployed given the absence of a suitable position for which he possessed the skills and competence.
[17] It follows that I have found that the dismissal of Mr Bizzaca was by way of genuine redundancy. It is accepted in an unfair dismissal case that where it is found there was a genuine redundancy then the employer has a complete defence to the application. 10 The Application is therefore dismissed. An order11 dismissing the Application will be issued concurrently. Comprehensive reasons follow.
Background
Westelect’s financial position
[18] Westelect is a business that provides various services including labour hire, manufacturing of electrical switch boards and equipment substations, installing high voltage installation works and testing and repairing cables and equipment in accordance with purchase orders from clients. 12 At its largest and most profitable Westelect’s workforce consisted of 50 employees occupying full-time and casual positions.13
[19] In 2012, Mr Cunningham and Mr Morcombe took over the reins of the business after a Mr James Green, Director and Chairman of the business (Mr Green), resigned. 14
[20] Mr Cunningham and Mr Morcombe assumed financial management of the business with Mr Cunningham responsible for paying debts and bills and Mr Morcombe responsible for the payment of wages. Mr Cunningham said that he was responsible for the day to day operations of the business and managed the engagement of staff and terminations of employment. 15
[21] By 2015/16 Westelect had completed some of its key contracts and the casual employees in the high voltage team and construction team were no longer required. 16 By 2015/2016 Westelect was showing a loss on its financial records17 and in response the business employed a Mr Bill Snowden (Mr Snowden) to turn things around.18 Mr Snowden was unable to reduce the significant overheads of the business and voluntarily resigned from Westelect after serving approximately 12 months.19 During 2016/17 Westelect again made a net loss.
[22] In 2017, Westelect reviewed its financial position and decided it needed to significantly reduce overhead costs to save the business. 20 By November 2017, there were nine employees of Westelect including an Administrative Coordinator and Assistant.21 Come 6 December 2018, Mr Cunningham dismissed the Administrative Coordinator by way of redundancy.22
[23] Mr Cunningham’s evidence is that the business made administrative errors regarding its payment of tax and at the time of the determinative conference was on a long term payment plan with the ATO. 23
[24] By May 2018, the business had eight employees inclusive of Mr Cunningham. In light of Westelect’s financial state, Mr Cunningham decided to make the positions of Operations Manager, HR/OHS Manager and Administration Assistant redundant. 24 Mr Cunningham forecasted that for the 2017/18 financial year the business would continue to be operating at a loss.25
Mr Bizzaca’s employment
[25] Westelect initially employed Mr Bizzaca as an Underground Electrician in 2008. 26 He was later promoted to an Electrical Supervisor/Electrician, and in May of 2010 was offered the position of General Manager by Mr Green.27 While working as the General Manager, Mr Bizzaca continued to work on various mine sites as an Underground Electrician and a Maintenance Electrician.28
[26] Mr Cunningham recalls that in July 2009, Mr Bizzaca approached him and ‘in substance requested an office position with the Company, saying words to the effect that he no longer wanted to work on site or away from Perth for personal reasons’ 29. Mr Cunningham’s evidence was that Mr Bizzaca had consistently indicated that he did not want an on-site position. Mr Bizzaca says that was not the case and that once he had overcome his depression he was able to undertake site work, which he did.
[27] In October 2013, Mr Morcombe and Mr Cunningham offered Mr Bizzaca the position of Manager – HR, OHS and Logistics. 30 Mr Bizzaca accepted the position on the understanding that he would still be required to undertake relief electrical work on site.31 For the period 2014 until 2017, Mr Bizzaca continued to work on site on occasion as an Electrician while undertaking the role of Manager – HR, OHS and Logistics.32
[28] As Mr Bizzaca had no previous human resources, office or occupational health and safety experience, Mr Cunningham arranged and paid for Mr Bizzaca to attend a relevant course. 33
[29] In or around March 2017, Mr Morcombe discussed with Mr Bizzaca a change in role to HR/OHS Manager. The responsibilities of this role extended to administration and workshop duties.
[30] Come November 2017, Mr Cunningham decided that the Administration Coordinator role would be made redundant and assigned to Mr Bizzaca administrative duties including payroll, receipting of goods, invoicing clients in addition to Mr Bizzaca’s regular duties. 34 At this time, Mr Bizzaca said that he questioned Mr Cunningham whether the business could afford to keep him on. Mr Bizzaca said that Mr Cunningham responded that he had come up with cost cutting measures and had worked out a financial plan to keep the company solvent, and that Mr Bizzaca was far too valuable to let him go.35 It was the evidence of Mr Cunningham that he stated to the effect that ‘Mr Bizzaca would be the last to go’.
[31] Having been given access to Westelect’s accounting system Mr Bizzaca could see the banking transactions of the business. 36 Mr Bizzaca observed that for a period between August and November 2017, a sum of approximately $9000.00 was transferred to an account that was a phone number reference for an ex-employee.37 Mr Bizzaca had witnessed the ex-employee meet with Mr Cunningham in the carpark of Westelect.38
[32] Mr Bizzaca said that on or around 12 February 2018, he met with Mr Cunningham and expressed his concerns about the money transfers, how they looked suspicious and the concerns he held about Mr Cunningham’s mental health namely that he considered Mr Cunningham had an addiction to the drug ‘ice’. 39 Mr Cunningham confirmed that the meeting took place, said that he thanked Mr Bizzaca for bringing the concerns to his attention and denied that he had an ‘ice’ addiction.
[33] Subsequent to the discussion on or around 12 February 2018, Mr Bizzaca said that Mr Cunningham did not present for work for a fortnight. 40
[34] Mr Bizzaca said that he shared his views about Mr Cunningham to Mr Morcombe. According to Mr Bizzaca the relationship between Mr Cunningham and Mr Morcombe was already fractious and Mr Cunningham’s absence in February/March 2018 exacerbated the problems in the relationship. It was Mr Cunningham’s evidence that the relationship between him and Mr Morcombe was toxic.
[35] Mr Morcombe is said to have approached Mr Bizzaca and asked whether he was willing to buy the business to which Mr Bizzaca requested up to date financial figures. 41 It was further said that there was a delay with Mr Cunningham providing the financial figures because tax statements from the prior two years had not been completed.42 On 18 April 2018, Mr Bizzaca said that he received a text message from Mr Cunningham discussing the sale, in which he discussed with Mr Cunningham the proposed sale of the business on 30 June 2018.43 However, come 30 June 2018, the sale of shares did not eventuate. Mr Cunningham said that he obtained legal advice and acted on that advice.
[36] On 3 May 2018, Mr Bizzaca said he was handed a redundancy letter by Mr Cunningham in a meeting which, according to Mr Bizzaca lasted for approximately 90 seconds. 44 Mr Bizzaca had recorded the meeting on his iPhone and no objection was made regarding the receipt of this evidence:
Date 03.05.18
Time: 09.30am
Adrian Cunningham (AC): This is Lauren.
Elton Bizzaca (EB): Nice to meet you.
AC: Just here as a second person.
EB: Yep.
AC: I think you know what’s coming up
EB: Of course I do
AC: Even if I was going and Kingsley was staying probably that position that you are holding anyway was um not gunna be valid for the size of the business and all that sort of stuff mate
EB: Yep
AC: So its nothing personal its purely for the business and um yeah. Any questions anything you wanna:
EB: What have you actually told me?
AC: Um well you’ve been, your positions made redundant
EB: Right
AC: Um yep, as of today
EB: As of today?
AC: Yep um so we’ll pay out all your time that you need to do and all othat sort of stuff
EB: Yep
AC: So there’s your official letter
No sound while EB reads letter
EB: Alrighty
AC: So um yeah, we’ll get your long service leave all sorted out and paid out
EB: Yep
AC: Along with all your annual leave
EB: Yeah no worries
AC: and all that sort of stuff
EB: Alirght
AC: Yeah so if you wanna just get your shit and
EB: Yeah
AC: get one of the boys to give you a lift home mate
EB: Yeah righto, ok.
[37] Mr Bizzaca said that because of his position at Westelect he was aware that the business was still providing services to clients and required Electricians. By way of example, Mr Bizzaca referred to coverage for an Underground Electrician at the Jaguar mine site, an advert that Westelect placed on Seek on 1 June 2018 for HV Mobile Plant Electrician and the supply of labour to Elphinstone Mechanical Services where Westelect had been trying to find electrical personnel since the beginning of 2018. 45
[38] According to Mr Bizzaca, on 18 April 2018 he received a text message from Mr Cunningham in which work for a contractor was traversed. That work involved the provision of boards and extension cables, which, Mr Bizzaca said, he was experienced to do. The work was to be completed by the end of June 2018. 46
[39] Mr Cunningham was emphatic that there were no positions to place Mr Bizzaca in at the time of the redundancy of his position.
[40] It was the view of Mr Bizzaca that the Westelect Agreement applied to his employment.
[41] The Westelect Agreement stated that the parties to the agreement were Westelect and ‘eligible employees’ whose classification of work is provided for in the Westelect Agreement. ‘Eligible employees’ were defined in the Westelect Agreement as:
means employees that are able to approve this Agreement at its commencement, and future employees whose employment will be subject to this Agreement as a result of this Agreement forming part or all of the offer of employment, and existing employees whose employment becomes governed by this Agreement as the result of the termination of a previously registered workplace agreement.
[42] The classification structure under the Westelect Agreement was set out in Appendix A 47 and included the classifications of tradesman, apprentices (1st to 4th year) and adult apprentice.
Submissions of the Applicant
[43] In short, the first limb of Mr Bizzaca’s case was that the Westelect Agreement applied to him and that Westelect did not consult him about the redundancy of his position in accordance with that Agreement. There were, according to Mr Bizzaca, positions in which he could have been redeployed but they were never discussed with him.
[44] The second limb of Mr Bizzaca’s case was that his redundancy was in substance a sham and was motivated not by genuine operational reasons but rather by the souring of the relationship between him and Mr Cunningham in February 2018 and the failed buy out of shares.
Submissions of the Respondent
[45] In short the submissions of Westelect were that there was no longer the work duties to properly occupy a full-time HR/OHS Manager and those functions were easily absorbed by other staff.
[46] It was submitted:
● Westelect’s business shrank sharply from 50 permanent employees in 2013 to six permanent employees in 2018;
● new management had failed to arrest the decline;
● the market is improving but is very tight;
● the business had high levels of expenses including tax payment plans with the ATO;
● the viability of the business was in serious question;
● the Managing Director was securing the debts of the business with his family home and had grave concerns for his financial future; and
● the business could not afford to carry corporate overhead. 48
[47] Westelect submitted that while the Westelect Agreement was in operation it did not apply to Mr Bizzaca’s employment. Concerning the matter of redeployment, it was argued that there were no jobs available in the business at the time of dismissal, there were no suitable positions coming available in the foreseeable future, the role advertised some 6 weeks after Mr Bizzaca’s departure required dedicated skills that Mr Bizzaca did not have and Mr Bizzaca had made it clear that he did not want to work on site.
Matters in dispute
[48] The crux of the matter is whether there was a genuine redundancy of Mr Bizzaca’s position.
[49] Mr Bizzaca submitted that central to his argument was that there had not been any consultation or reasonable attempt to redeploy him. Further, he advanced that his dismissal arose because of personal grounds. That is Westelect was motivated to dismiss him due to the deterioration in the relationship between him and Mr Cunningham.
[50] Contrary to Mr Bizzaca’s submissions, Westelect advanced that the dismissal was not unfair on the basis that it was a genuine redundancy. Westelect said that Mr Bizzaca was not award covered, and an enterprise agreement did not apply to him. Further, Mr Cunningham had in the past consulted with Mr Bizzaca and for that matter other employees, about the financial state of the business. Mr Cunningham had considered redeployment opportunities for Mr Bizzaca. Notwithstanding there were no alternative positions in which to place him. Westelect’s financial position meant that various positions in the business were no longer financially viable given the reduction in employee headcount and the burden of overheads.
Protection from Unfair Dismissal
[51] Section 394(1) provides that a person who has been dismissed may apply to the Commission for an order under Division 4 of Part 3-2 of the Act granting a remedy for unfair dismissal.
[52] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s 385 existed. Section 385 provides the following:
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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
[53] Section 396 provides that before considering the merits of an application for an unfair dismissal remedy order, the Commission must determine some other initial matters. Section 396 is as follows:
396 Initial matters to be considered before merits
The FWC must decide the following matters relation 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.
[54] The effect of s 396 is that if a dismissal was a case of genuine redundancy, the Commission does not need to consider whether it is satisfied the dismissal was harsh, unjust or unreasonable.
[55] It is not in dispute that Mr Bizzaca made his application for an unfair dismissal remedy within the period required in s 394(2) and that he is a person protected from unfair dismissal.
[56] The employer bears the evidential burden concerning its objection.
Genuine redundancy
[57] The term ‘genuine redundancy’ is defined in s 389 of the Act in the following terms:
389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.
[58] Section 385(d) provides that if I am satisfied that the dismissal was a genuine redundancy then it cannot be an unfair dismissal. There are various factors to consider when arriving at a decision on whether the redundancy is a genuine redundancy.
No longer requires the person’s job to be performed
[59] To be satisfied the dismissal was a case of genuine redundancy, the Commission must be satisfied the role was no longer required to be performed by anyone in the business because of operational requirements. 49
[60] The Act does not define the term ‘operational requirements’. It is a broad term that permits consideration of many matters including the state of the market in which the business operates and the application of good management to the business. 50 Further examples include a downturn in trade that reduces the number of employees required, and the employer restructuring the business to improve efficiency, including the redistribution of tasks done by a particular person between several other employees resulting in the person’s job no longer existing.51
[61] An employee may still be genuinely made redundant when there are aspects of the employee duties still being performed by other employees 52. In Kekeris v A. Hartrodt Australia Pty Ltd T/A A. Hartrodt 53, Hamberger SDP found:
When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of the two positions in the new structure. The test is not 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 the previous job persist but are redistributed to other positions. The test is whether the job performed by the applicant still exists. 54
[62] It should be noted it is the ‘job’ that is no longer required to be performed, rather than the ‘duties’. 55 The onus rests with the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements.56
Consideration
[63] Westelect clearly decided that it was in its interests to make redundant various positions in the business. It viewed it as not only a proper and appropriate operational change and had taken legal advice in this respect, but a change that was necessary given the financial situation currently facing it.
[64] Mr Cunningham’s evidence concerning the ending of contracts with two principals was uncontested as was the veracity of the evidence concerning the Profit and Loss Statements and the ATO Payment Plan. The detail of which was traversed earlier in these reasons.
[65] It was evident from the material relied upon by Westelect and from Mr Cunningham’s oral evidence that Westelect was under significant financial stress. There was no suggestion from Mr Bizzaca that this was other than the case. It was apparent that Mr Bizzaca shared in the knowledge that Westelect was struggling given his access to the ‘Xero’ accounting system. 57
[66] The HR/OHS Manager position was not the only position that had been made redundant. In his evidence Mr Bizzaca referred to having sat in on the redundancy meeting of a colleague in or around November 2017, to support Mr Cunningham. 58 Mr Bizzaca said that it was around this time he asked Mr Cunningham whether he could afford to keep him on and Mr Cunningham assured him he was too valuable to let go.59 Mr Cunningham recalls the discussion as one in which he said to the effect that Mr Bizzaca would be the last to be let go.
[67] Mr Bizzaca had observed the decline in staff numbers, and had expressed concern about the viability of his job asking whether Mr Cunningham could afford to keep him. While it was not that case that an independent auditor had been asked to review the financial records of the business, and Mr Cunningham admitted to having retrieved the data from Westelect’s accounting system himself, there was no evidence before me to show that the information provided was unreliable or a mere fabrication.
[68] The second limb of Mr Bizzaca’s argument was that the redundancy of his position arose from personal reasons, namely that the relationship between him and Mr Cunningham had soured.
[69] According to Mr Bizzaca the reason for the breakdown in the relationship was twofold. In February 2018, Mr Bizzaca met with Mr Cunningham and in effect informed him that staff were concerned about his erratic behaviour in the workshop and on client mine sites, and there was concern that he had a drug addiction which was being supported by syphoning money out of the business. 60 Mr Cunningham admitted the discussion took place and denied that he was a drug addict. Second, Mr Bizzaca had sided with Mr Morcombe regarding a potential buy out of Mr Cunningham’s interest in the business and this, Mr Bizzaca said, had also contributed to the breakdown.
[70] I am under no illusion that the relationship between Mr Bizzaca and Mr Cunningham is good. Both parties were at all times respectful in the determinative conference. However, there was undeniably a simmering antagonism between the two and the assistance of Counsel to ensure the requisite level of decorum was commendable.
[71] The issue however is whether Westelect no longer required the position of HR/OHS Manager because of changes in the operational requirements of its enterprise. Based on the evidence before me and on the balance of probabilities, I have found that this is the case.
[72] I am not persuaded that the redundancy of the position was a ruse or a sham or there was some other motive to make the decision that would suggest that it was other than operational requirements that necessitated the change. To the contrary, it seems to me that the decision was soundly based on Westelect’s financial circumstances. The financial basis for the decision was premised on Mr Cunningham’s appreciation of the financial state of the business that not only justified the decision, but made a compelling case for it. Mr Bizzaca’s statement in his evidence that the dismissal was a result of personal reasons did not rise above the level of assertion and was not supported by probative evidence.
Consultation
[73] The Explanatory Memorandum to the Fair Work Bill 2008 (Cth)states the following in respect of consultation in s 389 of the Act:
1550. Paragraph 389(1)(b) provides that it will not be a 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.
[74] If an employer is obliged to consult and fails to do so it is said that there cannot be a genuine redundancy. 61 Consultations should be meaningful and should be engaged in before an irreversible decision to terminate has been made.62
[75] Consultation is not perfunctory advice on what is about to happen, consultation is providing the individual, or other relevant persons, with a bona fide opportunity to influence the decision maker. 63
Consideration
[76] Mr Bizzaca was firm in his view that the Westelect Agreement applied to him in his employment.
[77] The Westelect Agreement stated that the parties to the agreement were Westelect and ‘eligible employees’ whose classification of work is provided for in the Westelect Agreement. ‘Eligible employees’ were defined in the Westelect Agreement as:
means employees that are able to approve this Agreement at its commencement, and future employees whose employment will be subject to this Agreement as a result of this Agreement forming part or all of the offer of employment, and existing employees whose employment becomes governed by this Agreement as the result of the termination of a previously registered workplace agreement.
[78] For the Westelect Agreement to apply to an employee their classification of work must be provided for in the Westelect Agreement. The classification structure under the Westelect Agreement is set out in Appendix A 64 and includes the classifications of tradesman, apprentices (1st to 4th year) and adult apprentice.
[79] While Mr Bizzaca held a trade qualification and was at times required to undertake some site work and utilise this trade, his role within Westelect was primarily the HR/OHS Manager, for which he had provided a position description. 65
[80] Mr Bizzaca submitted that his employment contract of 18 May 2010 for the position of General Manager indicated that he was paid in accordance with Westelect Agreement regarding his sick leave. However, I consider that nothing turns on this. Having had regard to all the circumstances surrounding Mr Bizzaca’s employment, his employment contract and the terms of the Westelect Agreement, I remain unconvinced that at the time it was decided to make the position of HR/OHS Manager redundant the Westelect Agreement applied to Mr Bizzaca. It follows that there was no obligation upon Westelect to consult with Mr Bizzaca regarding the redundancy.
Redeployment
[81] A dismissal is not a case of genuine redundancy if it would have been reasonable in all circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer.
[82] The Full Bench in Ulan Coal Mines Ltd v Honeysett 66made obiter remarks about the operation of s 389(2):
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)(a) that a redundant employee be placed in 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.
[83] The consideration of the reasonableness of redeployment involves an examination of the actions or steps taken by the employer to redeploy the employee and the actions of the employee, their conduct and approach to the redeployment. 67
[84] For the purposes of s 389(2) the Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. 68
[85] The Explanatory Memorandum to the Fair Work Bill at paragraph 1552 provides:
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.
[86] The decision in Ulan Coal Mines Limited v Honeysett and others 69 dealt extensively with the redeployment obligations set out in s 389(2) of the Act. I have considered the decision of the Full Bench in that matter and the decision of Technical and Further Education Commission TA TAFE NSW v Pykett.70
Consideration
[87] Mr Bizzaca said it would have been reasonable in all the circumstances to have redeployed him, particularly as he was a qualified Electrician. I have found that this was not the case. I have considered the steps taken by Mr Cunningham 71, which unsurprisingly were fairly limited given the limited number of positions within the business.
[88] Mr Bizzaca referred me specifically to the vacant positions of HV Mobile Plant Electrician required for site work at a miner that had been posted on ‘Seek’ on 1 June 2018. While the advertisement was posted nearly a month after Mr Bizzaca was dismissed it was accepted by the parties that Westelect had been attempting to recruit for these positions for some time with a view to placing them on a client’s mine site.
[89] Westelect submitted that Mr Bizzaca did not possess the requisite skills for the position. The client seeking a HV Mobile Plant Electrician position had specifically requested that the Electrician have experience on mobile plant. Mr Cunningham’s evidence was to the effect that Mr Bizzaca did not meet the client’s requirements having not worked on mobile plant.
[90] Mr Bizzaca conceded that he would require training to do the job. The requirement for further training does not in and of itself mean that it would not have been reasonable in all the circumstances to redeploy. The exclusion in s 389(2) poses a hypothetical question which must be answered by reference to all the relevant circumstances. 72 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.73
[91] I am of the view that in the circumstances of this case the position of HV Mobile Plant Electrician was not suitable. In drawing this conclusion, I have had particular regard to Westelect being a small business employer which was facing a grave financial situation, and at a minimum, retraining was required for Mr Bizzaca to be placed in the position. The extent of that retraining was not traversed in evidence. But, it was purported that Mr Bizzaca lacked mobile plant experience. Therefore, I remain firm in my view that it would not have been reasonable for a small business employer in the circumstances such as described to have had to redeploy Mr Bizzaca into the aforementioned role.
[92] On whether it would have been reasonable in all the circumstances to redeploy Mr Bizzaca, I make the following observation. The financial situation of Westelect was grave. Over the course of the last 7 months, three employees had been made redundant. The business was focused on cutting corporate overheads, making payments to the ATO regarding its tax liability and ensuring that employees engaged in the business generated revenue.
[93] In or around 2009, Mr Bizzaca had approached Westelect and requested to work in Perth rather than on site as he had depression. This request was accommodated by Westelect and Mr Bizzaca thereafter was employed in at least three different, albeit similar, office positions in the Perth office. On occasions he worked on site. Westelect previously saw fit to make changes in its operations to accommodate Mr Bizzaca. However, the evidence showed that the operational requirements of the business had now changed and in light of this it would not have been reasonable in all the circumstances for Mr Bizzaca to have been redeployed given the absence of a suitable position for which he possessed the skills and competence.
Conclusion
[94] For the aforementioned reasons, I am satisfied that Mr Bizzaca’s dismissal was a case of genuine redundancy.
DEPUTY PRESIDENT
Appearances:
Mr E Bizzaca, as the Applicant.
Mr S Entriken, of Allion Partners, on behalf of the Respondent.
Hearing details:
2018.
August 6.
Printed by authority of the Commonwealth Government Printer
<PR610051>
1 AC325944.
2 Section 385 of the Act.
3 Section 389(1)(a)-(b) of the Act.
4 Section 389(2) of the Act.
5 Witness Statement of Mr Adrian Cunningham (Exhibit R1) [22].
6 Exhibit R1 [54] AC-3.
7 Ibid [48].
8 Ulan Coal Mines Ltd v Honeysett[2010] FWAFB 7578 [26].
9 Ibid.
10 Ibid.
11 PR610305.
12 Exhibit R1 [10].
13 Ibid [22].
14 Ibid [12].
15 Ibid [13].
16 Ibid [13].
17 Ibid [28]; AC-3.
18 Ibid [29].
19 Ibid [30].
20 Ibid [33].
21 Ibid [34].
22 Ibid [35].
23 Ibid [40]; AC-5.
24 Ibid [45].
25 Ibid [54].
26 Witness Statement of Mr Elton Bizzaca (Exhibit A2) Exhibit A2 [5].
27 Ibid [7].
28 Ibid.
29 Ibid [18].
30 Ibid [10].
31 Ibid.
32 Ibid [11] – [13].
33 Ibid [19].
34 Ibid [18].
35 Ibid [19].
36 Ibid [24].
37 Ibid.
38 Ibid.
39 Ibid [26].
40 Ibid.
41 Ibid [29].
42 Ibid [30].
43 Ibid; Document 7.
44 Ibid.
45 Ibid [16].
46 Ibid [17].
47 Westelect Agreement cl.5.
48 Respondent’s Outline of Submissions [21].
49 Section 389(1)(a) Fair Work Act 2009 (Cth).
50 Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.
51 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1548].
52 Dibb v Commissioner of Taxation (2004) 136 FCR 388, 404-405.
53 Kekeris v A. Hartrodt Australia Pty Ltd T/A A.Hartrodt[2010] FWA 674.
54 Ibid [27].
55 Ulan Coal Mines Ltd v Howarth, (2010) 196 IR 32 [17].
56 Keiselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864 [34].
57 Exhibit A2 [24].
58 Ibid [19].
59 Ibid.
60 Ibid [26].
61 See also UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263.
62 Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company (1998) 88 IR 202.
63 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodaphone Network Pty Ltd PR911257 [25].
64 Westelect Agreement cl.5.
65 Exhibit A2 [26]; Exhibit A3 Document 5.
66 [2010] FWAFB 7578 [26].
67 Technical and Further Education Commission T/A TAFE NSW v L.Pykett[2014] FWCFB 714 [37].
68 Ibid [36].
69 (2010) 196 IR 32.
70 (2014) 240 IR 130.
71 Exhibit R1 [48].
72 Ulan Coal Mines Ltd v Honeysett[2010] FWAFB 7578 [26].
73 Ibid.
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