Mr Gary Beach v Ansaldo STS Australia Pty Ltd T/A Ansaldo STS

[2013] FWC 8905

[2013] FWC 8905

FAIR WORK COMMISSION

DECISION

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

Mr Gary Beach
v
Ansaldo STS Australia Pty Ltd T/A Ansaldo STS
(U2013/2158)

COMMISSIONER SPENCER BRISBANE, 21 NOVEMBER 2013

Application for relief from unfair dismissal - jurisdictional objection - genuine redundancy.

Introduction

[1] This determination relates to an application made by Mr Gary Beach (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy on the grounds that the termination of his employment from Ansaldo STS Australia Pty Ltd T/A Ansaldo STS (the Respondent/the Employer) was harsh, unjust and or unreasonable. The Respondent in this matter has raised a jurisdictional objection (the jurisdictional objection) to the application alleging that the dismissal was a case of genuine redundancy. This decision relates to the jurisdictional objection only.

[2] The Respondent requested that the jurisdictional objection be determined prior to the matter being conciliated.

[3] Directions were issued in the matter requiring the parties to file material in relation to the jurisdictional objection only. A Mention was held before the Commission on 4 November 2013. A number of matters were discussed at the Mention following which, correspondence was sent to the parties advising that the Commission was of the view that the matter may be determined on the basis of the material filed in accordance with the Directions, subject to the views of each party. Neither party responded to this correspondence objecting to that course.

[4] While not all of the evidence and submissions in this matter are referred to in this decision all of such have been considered.

Relevant Provisions of the Legislation

[5] The substantive application has been made pursuant to s.394 of the Act. Section 394 provides as follows:

“394 Application for unfair dismissal remedy

(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.

Note 1: Division 4 sets out when the FWC may order a remedy for unfair dismissal.

Note 2: For application fees, see section 395.

Note 3: Part 6 1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

[6] It is not in dispute that the application was filed within the time prescribed by s.394(2)(a).

[7] Section 382 of the Act provides 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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[8] The relevant consideration in relation to the jurisdictional objection is s.385(d).

[9] Section 389 provides the for the meaning 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.

Summary of the Respondent’s Submissions and Evidence

[10] The Applicant was employed with the Respondent in the position of Construction Manager. The Applicant was undertaking work on the Rio Tinto HD4 Project North west Australia.

[11] The Respondent submitted that the nature of this contract work is that there are peaks and troughs in the requirements of the project and that in any event this project has a projected completion of end of May 2013. The Respondent submitted that at the end of this project it was envisaged that the Applicant would be reassigned to another project.

[12] The Respondent submitted that the Applicant was advised, on 17 April 2013, that the Respondent was undertaking a review of the specific area within which the Applicant worked. The Respondent submitted that the purpose of this review was essentially to accommodate an organisational change whereby the Respondent sought to reduce the number of Construction Managers commensurate with the reduction in projects currently undertaken by the Respondent.

[13] The Respondent submitted that the number of Construction Manager roles was reduced from 5 to 3, on 1 May 2013.

[14] To deal with this reduction in the number of Construction Manager roles, the Respondent submitted that a recruitment process was undertaken whereby each of the 3 existing Construction Managers applied for the 1 available position.

[15] The Respondent submitted that the recruitment process was undertaken by way of interviews conducted by Mr Adrian Smart, Manager of Construction, Mr Mosese Uluicicia, Human Resource Generalist and Ms Sheila Suppiah, also a Human Resource Generalist. The interviews were a assessment based on the skills, competencies and experience required for the vacant roles.

[16] The Respondent submitted that subsequent to the Applicant interview, the Applicant was identified as the second candidate. The role was eventually offered to the first ranked applicant for the position.

[17] Following this process the Respondent submitted that the Applicant was considered for redeployment opportunities which included the Respondent discussing Construction Manager roles for international projects, which the Applicant rejected.

[18] The Respondent submitted that there was no relevant industrial instrument applicable to the Applicant. In that sense the Respondent submitted that the obligation to consult is only in so far as is reasonable in the circumstances and referred to the notification to the Applicant, above, regarding the review process.

Summary of the Applicant’s Submissions and Evidence

[19] The Applicant submitted that he commenced employment with the Respondent on 10 November 2008 as a Site Supervisor. This included work on a number of projects within Queensland and New South Wales.

[20] The result was that the Applicant was offered an opportunity, in an acting capacity, to undertake work as a Construction Manager on a site in Western Australia. This position was confirmed as permanent in May 2010.

[21] Eventually however, the Applicant transferred to the Hope Downs 4 project, the site at which the Applicant worked until the time of his dismissal.

[22] The Applicant stated that during a period of leave from his employment, the Applicant was contacted by a colleague and advised that the Respondent had posted an updated organisation chart in which the Applicant was shown as having been demoted to a Senior Supervisor. The chart also advised that the existing Senior Supervisor had been promoted to Construction Manager.

[23] The Applicant stated that he contacted Mr Chris Gormlie, at the time the Senior Construction Manager, who “confirmed” the change and that it was as a result of “certain issues” with the project.

[24] The Applicant stated that he raised this as an internal grievance with the Respondent and was eventually “exonerated” and returned to the position as Construction Manager.

[25] The Applicant provided further submissions and evidence in relation to the delays at the site which it is not necessary to recount. What should be noted however is that the Applicant has given evidence in relation to various strained work relationships including with Mr Jason Greenslade, who by the period relevant to this consideration, had been appointed in the position of Senior Construction Manager.

[26] An important point in time, in the Applicant’s submission, is 5 April 2013 when the Applicant had a conversation with Mr Greenslade about various matters. The Applicant stated that during the conversation he advised Mr Greenslade that he “didn’t trust him as a Manager to give fair representation of [the Applicant’s] performance to either the client or other ASTS managers”.

[27] On Wednesday 17 April 2013, the Applicant stated that he attended a telephone meeting with Mr Smart, at which, the Applicant confirms, he was advised of the restructure, as submitted by the Respondent. The divergence is however that the Applicant stated that during this conversation he was advised that his role was “immediately” transferred to Perth. The Applicant was required to immediately travel to Perth to continue his work for the remainder of his “swing” (ie current roster).

[28] The Applicant filed a letter, dated 17 April 2013, signed by Mr Smart, which relevantly stated:

“As we discussed in our meeting today, due to business requirements the C&C Project organisation will undergo a review process with the intention to implement changes aimed at improving project efficiency.”

[29] The Applicant noted that it was his understanding that he was the only employee of the Respondent, working in Western Australia, who received such a letter. The Applicant considered that because of this, and the short notice with which the Applicant was expected to leave the site, he would not be returning to site as an employee of the Respondent.

[30] The Applicant stated that after arriving in Perth, on Friday 19 April 2013, he had a discussion with Mr Smart in which the review process was further discussed with him, and the proposed consultation process.

[31] Following a few days of work in the Perth office, and a period of leave, the Applicant returned to work and on 8 May 2013 a meeting occurred with the Applicant. An electronic invite to the meeting was sent to the Applicant which the Applicant stated was titled “Outcome of Organisational Review”.

[32] The Applicant stated that during this meeting Mr Smart confirmed that the organisational structure, relevant to the Applicant, had been “changed in line with project requirements”. The Applicant stated that he was advised of the reduction in the number of Construction Managers and that as the project on which he was currently working was coming to an end his role was “redundant”. The Applicant submitted that his employment was not as the Construction Manager for one project but that the Respondent’s allocation of Construction Managers to projects that was “purely arbitrary”.

[33] The Applicant stated that Mr Smart advised him that the position of “RCE South Construction Manager” (the Construction Manager of another project) was being advertised and that he was being invited to apply. The Applicant queried why he was not simply placed in another role as had occurred with the other staff who were currently working on the project at which the Applicant was formerly the Construction Manager.

[34] The Applicant’s submissions expressed general dissatisfaction with the handling of the process on the part of the Respondent and also the Applicant’s concerns that the review or redundancy was a misrepresentation on behalf of the Respondent to cover up issues with the project.

[35] On Thursday, 16 May 2013, the Applicant was invited, following some follow-up emails on the Applicant’s part, to an interview for the available position. This interview occurred at 2pm the following day. The Applicant accepted that the interview did take place with Mr Smart, further discussing the operational issues facing the Respondent over all of its projects.

[36] After a period of leave the Applicant and Mr Smart met, on 12 June 2013, to discuss the conclusion of the interview process. The Applicant stated that he was advised that he was unsuccessful in obtaining the role (he had been competing with two others for one role) and that the Respondent had not identified any other role for which he would be suitable. The Applicant’s employment ceased that day.

[37] The Applicant submitted that on 19 June 2013 (7 days after his dismissal) the Applicant applied for the role of Shift Supervisor with the Respondent. The Applicant submitted a copy of an internet printout which the Applicant stated identifies that the position was advertised on 17 June 2013.

[38] The Applicant accepted that he was offered a role in Malaysia, although he submitted that he brought about that offer after making further enquiries. The Applicant stated however that taking the position meant an imposition upon him and his family.

Consideration

s.389(1)(a) - No longer required to be done

[39] Whether a person’s job is no longer required to be performed by anyone is not an absolute consideration. The Explanatory Memorandum to the Fair Work Bill relevantly provides:

“Clause 389 – Meaning of genuine redundancy

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

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

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

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

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

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

[40] It is well settled that the requirement enunciated by s.389(1)(a) does not require that an employer demonstrate that absolutely no employee or other worker is undertaking the work that a dismissed Applicant was performing. The question is whether the employee’s “job” has survived the restructure or downsize of the employer’s business. The question does not go to whether the duties previously performed by the employee have survived. This is made clear by examples provided in the Explanatory Memorandum (extracted above).

[41] The Applicant has made a number of allegations regarding his suspicions or conclusions as to why he was removed from site and why his position was selected for redundancy. The task however, in relation to s.389(1)(a), does not involve the Commission considering the reason why a particular employee has been selected for redundancy as opposed to another employee, or the motives held by the Respondent in undertaking a review of operational requirements (for example). The task is to ask if the Applicant’s role was no longer required to be done by anyone, because of, operational requirements of the Respondent’s enterprise. This question must be answered on a consideration of the evidence and in the context of the words of the section.

[42] The Applicant did not seek to challenge the assertions of the Respondent that a review or reorganisation was taking place and that there was a consequent reorganisation or restructure of the project work, including of the various Construction Manager roles, in the Respondent. While the Applicant did make some submissions asserting that the “review” was, in his view, simply a mechanism to dismiss him, there was no evidence of such provided by the Applicant, beyond his opinion of the circumstances or process undertaken by the Respondent, that this was in fact the Respondent’s motive.

[43] The Commission is not required, in this matter, to consider whether the Respondent should have reviewed all Construction Managers or whether the process undertaken by the Respondent was fair from the perspective of the Applicant. All that is required to be considered, in accordance with s.389 of the Act, is whether the operational requirements of the Respondent’s enterprise were such, that the Applicant’s role was no longer required to be performed by anyone.

[44] The evidence is that the project which the Applicant was working on was coming to completion. The evidence is that the project work open to the Respondent was not as extensive as it previously was. The evidence is that a reorganisation had taken place and a subsequent reduction in the number of Construction Manager roles had occurred.

[45] The evidence is such that the Commission is satisfied, on the balance of probabilities, that the operational requirements of the Respondent involved a reduction in the number of Construction Manager roles. On a consideration of the evidence put by both parties the process undertaken by the Respondent was not unusual or so illogical in the circumstances as to have therefore simply been undertaken for vindictive purposes, as posited by the Applicant.

[46] The Commission is satisfied that s.389(1)(a) of the Act has been proved by the Respondent.

s.389(1)(b) - Consultation

[47] The obligation to consult is not an absolute obligation to consult. The Full Bench in Ulan Coal Mine Limited v Henry Jon Howarth and others said:

“We do not consider, in the particular circumstances of the present matter and having regard to the obligation under sub-clause 23.1 of the Agreement, that a further round of discussions was required to be held by the Company with the employees to be dismissed, either separately or as a group. This does not mean that such separate discussions might not be worthwhile and appropriate e.g. as part of the consideration of measures to mitigate the adverse affects of terminations or to ensure that opportunities for other employment and assistance are properly examined. However they are not part of the discussions envisaged and required under sub-clause 23.1 of the Agreement and that is the test in these particular circumstances. In different circumstances this will of course vary according to the terms of particular awards and agreements.” 1

[48] Neither party made any submission as to any applicable industrial instrument giving rise to an obligation to consult.

[49] The Commission is satisfied that it is likely that there was no obligation to consult, applicable to the Applicant arising from a modern award or enterprise agreement. The Applicant was employed in a fairly senior management position. Common industrial practice is that such positions would be governed by contract rather than convention industrial instruments however there was no evidence of such in this matter.

[50] However, the evidence before the Commission is that a process of consultation was undertaken. The Applicant’s submissions proceeded on the basis that the Applicant was cognisant of the review being undertaken. While the Applicant may disagree with the way in which that consultation or process occurred, the process of consultation that occurred is commensurate with satisfying s.389(1)(b) of the Act.

s.389(2) - Redeployment

[51] In Ulan Coal Mines Limited v Honeysett and other 2 the Full Bench said:

“The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the role, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.” 3

[52] Further the Full Bench said:

“It is an essential part of the concept of redeployment under s.389(2) that a redundant employee be placed into another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard...” 4

[53] The Applicant submitted that he could or should have been redeployed by the Respondent into another position. The Applicant’s reliance upon the advertisement for a “Shift Supervisor” is not one that, on the material, I am satisfied would have been reasonable for the Applicant to have been redeployed to.

[54] This is so, primarily, because the advertisement is issued after the Applicant was dismissed and after the redeployment exercise was undertaken. There is no ongoing obligation in s.389(2) for an employer to continually assess redeployment options for an employee after they have been dismissed on the basis of a genuine redundancy. This is confirmed by the inclusion of the words “would have” being the test prescribed by the legislation. That is, would it have been reasonable, at the time of the person’s redundancy for that person to be redeployed with the employer’s enterprise or that of an associated entity.

[55] Further however, the evidence before the Commission is that this position would have been at a lower level, than that which the Applicant was employed in, at the time his role was made redundant.

[56] Further there is no evidence before the Commission to satisfy the Commission that this alternate position submitted by the Applicant, was in fact vacant at the time of the Applicant’s dismissal and was therefore capable of being included in any redeployment consideration by the Respondent. The Applicant’s submissions accept that the role was advertised a few days after his dismissal.

Conclusion

[57] Where the Respondent raises a jurisdictional objection in a matter, the onus is on the Respondent to satisfy the Tribunal of their case. 5 As the Respondent has all the information relating to their objection, they need to lead evidence which demonstrates their case on the balance of probabilities.6

[58] A common misconception among employees, and in general, is that the concept of “genuine redundancy” within the Act’s regime provides the Tribunal a carte blanche to entirely review and consider the alleged redundancy from all facets. The language of the s.389 of the Act, the explanatory memorandum and the substantial volume of case law in the area makes it clear that the Commission’s role, in respect of a jurisdictional objection alleging a dismissal on the basis of a genuine redundancy, is a very limited inquiry on the part of the Commission. The Commission must only consider those matters specified in s.389 of the Act.

[59] Based on the material provided, the Respondent has satisfied the Commission on the basis of the change in business requirements and the reduction in projects and the evidence regarding the resultant reduction in Construction Manager roles, that the redundancy was a genuine redundancy within the meaning of s.389 of the Act. Accordingly, given that the redundancy was deemed to be genuine, in terms of s.389 of the Act, the dismissal of the employee in question cannot be an unfair dismissal in accordance with s.385 of the Act.

[60] Therefore, for the aforementioned reasons, the Applicant’s dismissal was a case of genuine redundancy; the jurisdictional objection is upheld. The Applicant was not unfairly dismissed. The application pursuant to s.394 of the Act must therefore be dismissed.

[61] I Order accordingly.

COMMISSIONER

 1   [2010] FWAFB 3488 at [31].

 2   [2010] FWAFB 7578.

 3 Ibid at [28].

 4 Ibid at [30].

 5   Crema and Others v Abigroup Contractors[2012] FWA 5322, Commissioner Cribb, at [81].

 6   See for example Govinda Prasad Dhungel v The Baking Company Australia Pty Ltd[2012] FWA 4717, Deputy President Sams; Eva v Victorian Radio Network Pty Ltd [2007] AIRC 814, Commissioner Eames.

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