Mr Garry Valenzisi v MaxiPARTS Pty Ltd

[2015] FWC 8102

[2015] FWC 8102

FAIR WORK COMMISSION

DECISION

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

Mr Garry Valenzisi
v
MaxiPARTS Pty Ltd
(U2015/12200)

COMMISSIONER SAUNDERS NEWCASTLE, 25 NOVEMBER 2015

Application for relief from unfair dismissal.

[1] Mr Garry Valenzisi was employed by MaxiPARTS Pty Ltd (MaxiPARTS) in the position of New South Wales Regional Manager in the period from 11 November 2014 until he was dismissed on 29 September 2015. Mr Valenzisi contends that his dismissal was harsh, unjust or unreasonable and has made an application (Application) to the Fair Work Commission (Commission) under section 394 of the Fair Work Act 2009 (Cth) (Act).

[2] MaxiPARTS conducts a wholesale and retail truck and trailer parts business. It has raised two jurisdictional objections to Mr Valenzisi’s Application:

(a) First, MaxiPARTS contends that Mr Valenzisi’s dismissal was a case of genuine redundancy; and

(b) Secondly, MaxiPARTS contends that Mr Valenzisi earned more than the high income threshold ($136,700 per annum).

[3] Both jurisdictional objections were listed for hearing/conference on 24 November 2015. Mr Valenzisi represented himself and Mr Ian Else, Group Human Resources Manager, represented MaxiPARTS. After taking into account the wishes of the parties as to the way in which the Commission should consider and inform itself in relation to the Application, I decided to conduct a conference under section 398 of the Act to determine the jurisdictional objections raised by MaxiPARTS.

Genuine Redundancy

[4] Section 389 of the Act defines genuine redundancy as follows:

“(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.”

Operational requirements

[5] The change in operational requirements of MaxiPARTS’ enterprise relied on by MaxiPARTS is a downturn in the financial performance of the MaxiPARTS business across Australia and the need to reduce costs. In particular, MaxiPARTS adduced evidence that its business across Australia was unprofitable in the 12 months prior to Mr Valenzisi’s dismissal. Mr Valenzisi accepted that evidence as accurate. I am therefore satisfied that there were changes in the operational requirements of MaxiPARTS’ enterprise at the time of Mr Valenzisi’s dismissal.

[6] Mr Valenzisi submits, in effect, that there was no causal connection between the changes in operational requirements of MaxiPARTS’ enterprise and his dismissal. Mr Valenzisi relies primarily on the following facts and circumstances in support of this submission:

(a) the fact that Mr Valenzisi’s performance was assessed as good during his six-month performance appraisal, yet he was not offered the role of Northern Regional Manager or the role of Southern Regional Manager, both of which were vacant and available shortly before the decision to make Mr Valenzisi’s position redundant and dismiss him on the ground of redundancy;

(b) Mr Valenzisi was not given prior warning about, nor was he consulted in relation to, the restructure or the redundancy of his job. Mr Valenzisi was travelling away from home on business and was about to attend a dinner with a client of MaxiPARTS when he received a telephone call from a senior manager of MaxiPARTS, informing him not to attend the dinner with the client and instead to travel back to his home location and attend the MaxiPARTS Warnervale branch office the next day for a meeting with his manager. At that meeting Mr Valenzisi was informed that his job was redundant as a consequence of a restructure and his employment would cease immediately; and

(c) Mr Valenzisi had a number of disputes with another manager within the MaxiPARTS business, Mr O’Brien, in the months leading up to Mr Valenzisi’s dismissal in relation to Mr Valenzisi’s disappointment and frustration at not being informed of price increases communicated to customers of MaxiPARTS before Mr Valenzisi and his team were informed of those price increases. On the basis of those disputes and some comments made to Mr Valenzisi by other employees to the effect that he should “watch himself” and that he had “upset somebody”, Mr Valenzisi believes that his dismissal may have in some way been an act of retribution as a result of his disputes or personality clash with Mr O’Brien.

[7] Mr Valenzisi also submits that his job was not made redundant because MaxiPARTS still needs someone to undertake the duties and responsibilities he undertook as New South Wales Regional Manager.

[8] Mr Else relies on the following evidence to support MaxiPARTS’ case that the changes in its operational requirements was the reason for its decision that it no longer required Mr Valenzisi’s job to be performed by anyone:

(a) Mr Valenzisi’s performance was assessed as good during his performance review and neither he nor any other person in the MaxiPARTS business was ever informed that Mr Valenzisi’s performance formed any part of the reason for the decision to make his job redundant and dismiss him;

(b) prior to the restructure in September 2015, MaxiPARTS had three Regional Managers, all of whom reported to the National Retail Operations Manager. The Southern Regional Manager was responsible for branches in Victoria and South Australia. The New South Wales Regional Manager was responsible for branches in New South Wales. The Northern Regional Manager was responsible for branches in Queensland and Darwin. Following the restructure in September 2015, MaxiPARTS has only two Regional Managers:

• a Southern Regional Manager, who is responsible for branches in Victoria and South Australia and two branches formerly within the scope of the New South Wales Regional Manager’s role (the Albury and Wagga Wagga branches);



• a Northern Regional Manager, who is responsible for branches in Queensland and Darwin.

The National Retail Operations Manager now has responsibility, as a consequence of the restructure, for the branches located at Dubbo, Sydney (Ingleburn) and Warnervale (Central Coast). These branches were formerly the responsibility of the New South Wales Regional Manager;

(c) Mr Else gave evidence that this new structure is still in place and MaxiPARTS has no intention to change it or to replace Mr Valenzisi in the former role of Regional Manager New South Wales;

(d) Mr Valenzisi was informed orally at the meeting on 29 September 2015 that the reason for his dismissal was the redundancy of his position following the restructure;

(e) the letter of termination dated 29 September 2015 addressed to Mr Valenzisi contains the following statement in relation to the reason for his dismissal:

“Due to operational reasons, it has been decided to alter the MaxiPARTS regional structure from three regions to two. Regrettably this means that your role has now become redundant and as such your employment will cease effect immediately. We have enquired whether there are any vacancies within the MaxiTRANS group that match your skills and experience but unfortunately there are none currently available.”

(f) on termination Mr Valenzisi was paid 21 days’ remuneration in lieu of notice, in accordance with his contract of employment, and 13 days’ redundancy pay. The redundancy payment was made to Mr Valenzisi notwithstanding that he had no contractual entitlement to redundancy pay and he was not entitled to redundancy pay under the Act because he had not been employed by MaxiPARTS for at least 12 months. Mr Valenzisi was also offered outplacement assistance by MaxiPARTS;

(g) the Employment Separation Certificate provided by MaxiPARTS to Mr Valenzisi records “redundancy” as the reason for “separation”;

(h) the termination document prepared by Mr Valenzisi’s manager, Mr Simon Hole, records “redundancy only” as the reason for termination;

(i) on 30 September 2015, Mr Peter Loimaranta, General Manager of MaxiPARTS, issued a notice to all MaxiPARTS staff to inform them of the structural changes to its business. The notice includes the following statements:

“Regional Structure

• We have reduced our regional reporting structure from the current 3 regions (Northern, Southern and NSW) to 2 regions, being Northern and Southern.



• Regrettably this means Gary Valenzisi’s role as Regional Manager NSW has been made redundant and Garry has left the business.



• Effective immediately the Albury and Wagga Wagga branches will report through to the Southern Regional Manager – Erin Pistritto.



• Ingleburn, Dubbo and Central Coast will report directly to Simon Hole in the short term, however will be allocated to a combination of the Southern and Northern regions over the coming months.

I would like to thank Garry [Mr Valenzisi] for his effort and contribution over the last year with MaxiPARTS.”

(j) MaxiPARTS’ Managing Director made the decision to restructure the business and make Mr Valenzisi’s job redundant. He did so on the basis of a recommendation from MaxiPARTS’ General Manager, Mr Peter Loimaranta. The decision to restructure the business and make Mr Valenzisi’s job redundant was based on the financial performance of the business, particularly the New South Wales branches and the need to reduce costs in that part of the business;

(k) Mr Else, in his capacity as Group Human Resources Manager, had discussions with senior managers in the MaxiPARTS business as to the reason for the restructure and the redundancy of Mr Valenzisi’s job. There was no mention in any of those discussions of the disputes between Mr Valenzisi and Mr O’Brien, nor was there any suggestion in those discussions that Mr O’Brien had any influence over the decision to restructure or make a Mr Valenzisi’s job redundant;

(l) the following additional employees were dismissed on the grounds of redundancy in the 2015 calendar year as a consequence of the downturn in MaxiPARTS’ business:

• a Sales Representative in Melbourne in January 2015;



• a Branch Manager in Brisbane in February 2015;



• a Parts Interpreter in Brisbane in February 2015;



• an Administrative Support employee in Brisbane in February 2015;



• a National Operations and Fleet Manager in Melbourne in October 2015; and



• an Accounts Receivable employee in Melbourne in October 2015.

(m) in addition, about five employees of the MaxiPARTS business resigned in the 2015 calendar year and were not replaced as a consequence of the downturn in the MaxiPARTS business.

[9] The evidence set out in the previous paragraph (save for the final sentence in subparagraph (j)) was not challenged in any serious way by Mr Valenzisi. I accept it as truthful and reliable evidence.

[10] Mr Valenzisi pointed in submissions to the fact that the Ingleburn, Dubbo and Central Coast branches have not, contrary to the indication given in the note dated 30 September 2015, been allocated to “a combination of the Southern and Northern regions”. They remain the responsibility of the National Retail Operations Manager (Mr Hole). Mr Else gave evidence, which I accept, that the question of whether these branches will ultimately be allocated to “a combination of the Southern and Northern regions” or will remain with Mr Hole will depend on how the business performs in the near future.

[11] On the basis of the evidence summarised in paragraph [8] above, I am satisfied that MaxiPARTS no longer required Mr Valenzisi’s job to be performed by anyone because of the changes in the operational requirements of its enterprise.

[12] As to the submissions made by Mr Valenzisi on this issue 1:

(a) there is no question on the evidence that Mr Valenzisi’s performance was good and that he was not dismissed for poor performance. The fact that Mr Valenzisi was not offered the Northern Regional Manager’s role on the basis that the branches under Mr Valenzisi’s control in New South Wales had not performed well from a financial point of view and MaxiPARTS wanted to appoint to that role the candidate it considered would be best placed to lead the Northern Region of the business does not alter the fact that Mr Valenzisi’s performance was not any part of MaxiPARTS’ reason for restructuring the business or making Mr Valenzisi’s job redundant;

(b) the manner in which the decision to restructure the business and make Mr Valenzisi’s position redundant was communicated to Mr Valenzisi caused, in his mind, a reasonable concern as to the genuineness of the rationale for the decisions which had been made. It is likely that those concerns could have been avoided if MaxiPARTS had consulted with Mr Valenzisi about a proposed restructure and then communicated with him in an open way about both the recent recruitment of Regional Managers for the Northern and Southern Regions and the non-suitability of other vacant positions in the MaxiTRANS group. However, in light of the positive evidence adduced as to the reason for the restructure and the redundancy of Mr Valenzisi’s job 2, the absence of consultation and communication is not sufficient, in my view, to establish that the change in operational requirements was not the reason for the restructure and the redundancy of Mr Valenzisi’s job;

(c) the fact that Mr O’Brien was not involved in the decision to restructure the business or to make Mr Valenzisi’s job redundant satisfies me, on the balance of probabilities, that Mr Valenzisi was not dismissed because of his disputes or personality clash with Mr O’Brien; and

(d) I reject Mr Valenzisi’s submission that his job was not made redundant because MaxiPARTS still needs someone to undertake the duties and responsibilities he undertook as New South Wales Regional Manager. The test is not whether the duties survive. There can still be a genuine redundancy where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by Mr Valenzisi still exists. 3 It does not.

Consultation obligations

[13] It was not in contest and I am satisfied that Mr Valenzisi was not covered by a modern award or enterprise agreement in his position as New South Wales Regional Manager for MaxiPARTS. It follows that MaxiPARTS was not under an obligation pursuant to a modern award or enterprise agreement to consult with Mr Valenzisi about the redundancy of his job.

Redeployment

[14] At the time Mr Valenzisi’s job was made redundant Mr Else conducted a review of all available positions within the MaxiTRANS group of companies in an attempt to identify any suitable positions into which Mr Valenzisi could be redeployed. The MaxiTRANS group of companies is comprised of MaxiTRANS Limited and its subsidiaries including MaxiPARTS and a number of other entities which conduct businesses in the other operating divisions of the MaxiTRANS group. I am satisfied on the evidence that there are no associated entities of MaxiPARTS other than those entities in the MaxiTRANS group of companies.

[15] Mr Else identified the following vacant positions within the MaxiTRANS group of companies:

(a) Sales Representative – Derrimut (Melbourne);

(b) Apprentice Spare Parts Interpreter – Burpengary (Brisbane);

(c) Spare Parts Interpreter – Wingfield (Adelaide);

(d) Storeperson/Driver – Geelong;

(e) Apprentice Spare Parts Interpreter – Gladstone;

(f) Workshop Leading Hands – Sydney;

(g) Welder – Ballarat;

(h) Labourer – Ballarat; and

(i) Labourer – Hallam Panels (Melbourne).

[16] Mr Else formed the view that none of these available positions were suitable for Mr Valenzisi, in light of his skills, experience and seniority. Although Mr Else did not communicate this list of available positions to Mr Valenzisi at or about the time he was dismissed, Mr Valenzisi gave evidence that he would not have accepted any of the positions had they been offered to him. Having regard to these matters, I am satisfied that it would not have been reasonable in all the circumstances for Mr Valenzisi to be redeployed to any of these vacant positions within the MaxiTRANS group of companies.

[17] In addition to the vacant positions identified in paragraph [15] above, Mr Valenzisi submits that the Northern Regional Manager’s role and the Southern Regional Manager’s role were positions into which he could have been redeployed at the time he was dismissed.

[18] As to the Southern Regional Manager’s role, Mr Valenzisi gave evidence that he would not have been prepared to move to Melbourne, the location of the role, in order to take it up even if it had been offered to him. Further, the Southern Regional Managers role was filled about three weeks prior to the termination of Mr Valenzisi’s employment and the successful applicant for that role had been offered and accepted that role about seven or eight weeks before Mr Valenzisi’s dismissal. Accordingly, I am satisfied that it would not have been reasonable in all the circumstances for Mr Valenzisi to be redeployed in the Southern Regional Manager’s role.

[19] As to the Northern Regional Manager’s role, it was filled with an outside recruit one week prior to the time at which Mr Valenzisi’s job became redundant and he was dismissed. Mr Valenzisi gave evidence that he would have seriously considered moving to Brisbane to take the Northern Regional Manager’s role if it had been offered to him. The Northern Regional Manager’s role became vacant because the previous occupant of that role agreed with his employer to move back to his former position as the Branch Manager of the Gladstone branch of the MaxiPARTS business. Mr Valenzisi was aware that the Northern Regional Manager’s role was vacant, but did not apply for it because (a) he had only been employed by MaxiPARTS for less than one year and (b) he was not aware that his own position would or might be made redundant.

[20] MaxiPARTS considered the possibility of redeploying Mr Valenzisi to the Northern Regional Manager’s role before it was filled, but decided not to do so in light of the financial performance of the branches of the MaxiPARTS business for which Mr Valenzisi had responsibility in his position as New South Wales Regional Manager. Instead, MaxiPARTS employed the person it believed had the best experience, skills and qualifications to lead the Northern Region of the business back into a profitable situation.

[21] Although the Northern Regional Manager’s role was filled one week before Mr Valenzisi’s job became redundant and he was dismissed, the fact that MaxiPARTS actually considered the possibility of redeploying Mr Valenzisi to that role demonstrates that it was aware that Mr Valenzisi’s job would, or was likely to, become redundant in the near future. Accordingly, I am satisfied, on the balance of probabilities, that there was a “job or a position or other work” 4 within the MaxiPARTS business to which Mr Valenzisi could have been redeployed. The question is whether it would have been reasonable in all the circumstances for Mr Valenzisi to be redeployed to the position of Northern Regional Manager.

[22] In determining whether redeployment was reasonable a number of matters may be relevant, including:

(a) whether there exists a job or position or other work at which the employee can be redeployed; 5

(b) the nature of any available position; 6

(c) qualifications required to perform the job; 7

(d) the employees skills, qualifications and experience; 8 and

(e) the location of the job in relation to the employee’s residence and the remuneration which is offered. 9

[23] The fact that Mr Valenzisi undertook the New South Wales Regional Manager’s role for a period of approximately 11 months and his performance was assessed as good during that time demonstrates that he had the qualifications, skills and experience to be able to carry out the inherent requirements of the role of Regional Manager of the MaxiPARTS business. Mr Valenzisi was also willing to seriously consider moving to Brisbane to take up that role. These factors, together with the availability of the role and the fact that the role was obviously at or about the same level of remuneration as Mr Valenzisi’s role of New South Wales Regional Manager, weigh in favour of a finding that it would have been reasonable in all the circumstances for Mr Valenzisi to be redeployed into the Northern Regional Manager’s role. I also accept that requiring an employee, such as Mr Valenzisi, whose job has been made redundant to, in effect, compete with external applicants for an available position (the Northern Regional Manager’s role) may, in some cases, result in a finding that the dismissal was not a case of genuine redundancy because it would have been reasonable to redeploy the employee into the vacancy. 10 However, in circumstances where (a) the role of Northern Regional Manager is an important and senior role within the MaxiPARTS business, (b) the MaxiPARTS business across Australia had been unprofitable for the 12 months prior to the decision to make Mr Valenzisi’s job redundant, and (c) Mr Else gave evidence, which I accept, that the branches within the New South Wales region for which Mr Valenzisi had been responsible had not been performing well from a financial point of view in the period of months leading up to the decision to restructure the business in September 2015, I am of the view that it was reasonable in all the circumstances for MaxiPARTS to appoint the person it thought was best suited and qualified to undertake the role of Northern Regional Manager, rather than to redeploy Mr Valenzisi to that role.

[24] For the reasons set out above, I am not satisfied that it would have been reasonable in all the circumstances for Mr Valenzisi to be redeployed within the MaxiPARTS enterprise or the enterprise of an associated entity of MaxiPARTS.

Conclusion

[25] For the reasons set out above, I am satisfied that:

(a) MaxiPARTS no longer required Mr Valenzisi’s job to be performed by anyone because of the changes in the operational requirements of MaxiPARTS’ enterprise;

(b) MaxiPARTS was not under an obligation in a modern award or enterprise agreement to consult with Mr Valenzisi about the redundancy; and

(c) it was not reasonable in all the circumstances for Mr Valenzisi to be redeployed within MaxiPARTS’ enterprise or the enterprise of an associated entity of MaxiPARTS.

[26] It follows that Mr Valenzisi’s dismissal was a case of genuine redundancy within the meaning of section 389 of the Act. As a consequence, Mr Valenzisi was not unfairly dismissed within the meaning of section 385 of the Act.

[27] In light of my conclusion that Mr Valenzisi’s dismissal was a case of genuine redundancy within the meaning of section 389 of the Act, it is not necessary for me to determine MaxiPARTS’ jurisdictional objection concerning the high income threshold.

[28] The Application is dismissed.

COMMISSIONER

Appearances:

Mr Garry Valenzisi self-represented;

Mr Ian Else on behalf of MaxiPARTS.

Hearing details:

2015.

Newcastle:

November: 24.

 1   Summarised in paragraph [6] above

 2   Summarised in paragraph [8] above.

 3   Ulan Coal Mines v Howarth & Ors[2010] FWAFB 3488 at [16]-[19]

 4   Technical and Further Education Commission v Pykett[2014] FWCFB 714 at [36]

 5   Ibid

 6   Ulan Coal Mines v Honeysett (2010) 199 IR 363 at [28]

 7   Ibid

 8   Ibid

 9   Ibid

 10   Ulan Coal Mines v Honeysett (2010) 199 IR 363 at [34]

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