Mr Iheanacho (Uri) Urigwe v TAFE NSW, Sydney Institute

[2014] FWC 9168

[2014] FWC 9168

FAIR WORK COMMISSION

REASONS FOR DECISION

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

Mr Iheanacho (Uri) Urigwe
v
TAFE NSW, Sydney Institute
(U2014/10789)

SENIOR DEPUTY PRESIDENT DRAKE SYDNEY, 18 DECEMBER 2014

Application for relief from unfair dismissal.

[1] Mr Urigwe lodged this application for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) before the Fair Work Commission (Commission) on 8 July 2014. I heard two jurisdictional objections to the application lodged by TAFE NSW, Sydney Institute (TAFE) on 12 September 2014. They are set out below:

“1. The dismissal was a case of genuine redundancy.

2. The Fair Work Commission does not have jurisdiction, as the Fair Work Act 2009 (Cth) is constitutionally invalid insofar as it purports to interfere with the State’s ability to dismiss persons on redundancy grounds, contrary to the Melbourne Corporation principle as articulated in the High Court’s decision in Re Australian Education Union; ex parte Victoria (1995) 184 CLR 188.”

[2] After consideration of the relevant provisions of the Act I decided to grant permission for both parties to be legally represented.

[3] Genuine redundancy is defined at s.389 of the Act:

389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.

[4] In Kekeris v A. Hartrodt Australia Pty Ltd 1 , as a result of a restructure, four supervisory team leader positions were replaced by three team leader positions. In that decision, Senior Deputy President Hamburger said:

“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the [Act’s] explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions.” (at [27]).

[5] In Jones v Department of Energy and Minerals 2, Justice Ryan observed, a “job” for the purposes of s.389 involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p.308). His Honour considered a circumstance where an employer might rearrange an organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. He said:

“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308).

[6]  In Dibb v Commissioner of Taxation, 3 the Full Court of the Federal Court of Australia said (at [43]):

“...We consider that it is more accurate to say that an employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by any employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant.”

[7] The question to be determined in considering s.389(1)(a) of the Act is one of fact. In his application, Mr Urigwe submitted that, notwithstanding his termination, his position as a Computer Studies teacher with the respondent continues to exist. The respondent challenged this contention and submitted that it no longer required this work to be done by anyone.

[8] I have considered the letter from the respondent to Mr Urigwe dated 8 July 2014 (8 July Letter) that forms part of the statement of Mr Woolard, a solicitor from the Crown Solicitor's office, and paragraph 18 of the statement of Ms Renshaw, Associate Director of People, Planning and Performance. Both demonstrate compliance with the “Managing Excess Employees” policy. I have also considered paragraphs 24 and 25 of Ms Renshaw’s statement. I am satisfied and find that TAFE did not require the job Mr Urigwe previously performed to be performed by anyone because of changes in the operational requirements of TAFE.

[9] In relation to the requirements of s.389(1)(b), a Full Bench of this Commission has found that an employer must fully comply with the consultation obligations in any applicable enterprise agreement and/or a modern award to meet the requirement for a genuine redundancy 4. I have considered in particular the Change Management Plan attached to Mr Woolard’s statement. I am satisfied and find that TAFE complied with its industrial obligations to consult concerning Mr Urigwe’s redundancy.

[10] In relation to the application of s.389(2), I have to consider the implied limitation on Commonwealth power described by Dixon J of the High Court in Melbourne Corporation v The Commonwealth (Melbourne Corporation)as follows:

“The foundation of the Constitution is the conception of a central government and a number of State governments separately organised. The Constitution predicates their continued existence as independent entities.

...

The efficacy of the system logically demands that, unless a given legislative power appears in its content, context or subject matter so to intend, it should not be understood as authorising the Commonwealth to make a law aimed at the restriction or control of a State in the exercise of its executive authority.” 5

[11] More recently, the High Court considered the implied limitation in Clarke v Federal Commissioner of Taxation in which French CJ said that:

“...there may be some species of Commonwealth laws which would represent such an intrusion upon the functions or powers of the States as to be inconsistent with the constitutional assumption about their status as independent entities.” 6

[12] The High Court in Re Australian Education Union; Ex parte Victoria (Re AEU) elaborated on Melbourne Corporation by identifying two elements to the implied limitation:

"(1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities ('the limitation against discrimination') and...

(2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments."  7

[13] Re AEU concerned the application of provisions in interim federal industrial awards, made under a predecessor to the Act, to State of Victoria employees and found that:

“...critical to a State's capacity to function as a government is its ability, not only to determine the number and identity of those whom it wishes to engage at the higher levels of government, but also to determine the terms and conditions on which those persons shall be engaged” and, accordingly, that “the operation of the implied limitation would preclude the Commission from making an award binding the States in relation to qualifications and eligibility for employment, term of appointment and termination of employment, at least on the ground of redundancy.” 8

[14] The High Court reaffirmed its position in Re AEU in Victoria v The Commonwealth (Industrial Relations Act Case) 9 in which  it was required to determine the validity of certain provisions of the Industrial Relations Act 1988 (Cth), which was expressed to bind the States. The High Court read down provisions requiring there to be a valid reason for terminating an employee’s service, the payment of severance pay and orders requiring union consultation on the basis that these impair a State’s right to “determine the number and identity of [those] whom it wishes to dismiss...on redundancy grounds.”10

[15] The implied limitation has since been consistently applied by the Federal Court of Australia and by Full Benches of this Commission to quash award, enterprise agreement and Commonwealth statutory provisions where they would otherwise apply to restrict the redundancy of State employees. 11

[16] Whether a statutory corporation is a State agency for the purposes of the implied constitutional limitation can be ascertained from either the statute creating it 12 or the purpose for which the corporation exists.13

[17] In National Tertiary Education Industry Union v Bendigo Regional Institute of TAFE 14, a Full Bench of the Australian Industrial Relations Commission determined that Victorian TAFE Institutes were agencies of the State15 within the meaning of the implied limitation and were entitled to the benefits of that limitation, with the result that various clauses in an award applying to Victorian TAFE staff were invalid, by virtue of an analysis of the purpose for which the TAFEs were instituted and the State minister’s power to make directions in relation to employment at them16.

[18] I accept the respondent’s submissions that it is a statutory corporation constituted under s.4 of the Technical and Further Education Commission Act 1990 (NSW) and a statutory body representing the Crown under s.4(4) of the same legislative instrument.

[19] I have considered and accept the statement of Ms Renshaw which concerns the extent to which the respondent achieves public functions and is subject to ministerial direction, as well as the 8 July 2014 letter that forms part of Mr Woolard’s statement. 17

[20] I am satisfied that the respondent is an agency of the State for the purposes of the implied limitation.

[21] TAFE contends that s.389(2) of the Act practically and significantly impinges on the State’s exercise of constitutional power because of the redeployment requirements which it imposes despite a State agency having decided that it wants to make a particular person redundant 18. It submitted that the subsection ought to be read down in its entirety insofar as it applies to the respondent. It submitted that s.389(2) “has a more severely restrictive effect in relation to its decision-making capacity about redundancy than the consultation provisions...that were read down in the Industrial Relations Act case”19. It invited the Commission to take into account myriad issues pertaining to the respondent’s conduct,20 curtailing its ability to make decisions about the number and identity of the persons it employs and those which it makes redundant in much the same way as discussed in Re AEU.

[22]  A Full Bench of this Commission in Ulan Coals v Honeysett 21 (Ulan)discussed the factors necessary for consideration when determining whether it is reasonable in all the circumstances to redeploy an individual at the time of dismissal. These are:

(a) the managerial integration between associated entities;

(b) the nature of any available position;

(c) the qualifications necessary to perform the available position;

(d) the employee’s skills, qualifications and experience;

(e) the location of the job in relation to the employee’s residence;

(f) the remuneration which is offered.

[23] I am satisfied that the factors listed in Ulan require my examination of issues so closely interwoven with the respondent’s policies and practices as would enliven the implied constitutional limitation.

[24] The application is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr I. Collins for Mr Urigwe

Ms J Davidson of Sixth Floor Selbourne Chambers for the respondent

Hearing details:

2014.

Sydney:

12 September.

 1   [2010] FWA 674

 2 (1995) 60 IR 304

 3 [2004] FCAFC 126

 4    Campbell Australasia Pty Ltd v Mr Greg McNay and Mr Patrick Humphreys[2010] FWAFB 6048

 5   [1947] HCA 26

 6   [2009] HCA 33 at 32

 7   [1995] HCA 71 at 54

 8   [1995] HCA 71 at 58-60

 9 (1996) 187 CLR 416

 10 (1996) 187 CLR 416 at 521

 11   Instructive here are Re Australian Education Union; Ex parte Victoria (1996) 73 IR 250 and Australian Workers’ Union of Employees, Queensland v State of Queensland [2014] FWCFB 5546.

 12   Greater Dandenong City Council v ASU [2001] FCA 349

 13   National Tertiary Education Industry Union v Bendigo Regional Institute of TAFE (unreported, 16 April 1999, AIRC per Guidice P, Polites SDP and Smith C at [6])

 14   National Tertiary Education Industry Union v Bendigo Regional Institute of TAFE (unreported, 16 April 1999, AIRC per Guidice P, Polites SDP and Smith C at [6])

 15   National Tertiary Education Industry Union v Bendigo Regional Institute of TAFE at [8]

 16   National Tertiary Education Industry Union v Bendigo Regional Institute of TAFE at [9]

 17   Statement of Ms Renshaw at 18, 24-25.

 18   Australian Workers’ Union of Employees, Queensland v State of Queensland [2014] FWCFB 5546

 19   PN107

 20   PN105

 21   [2010] FWAFB 7578.

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