Mr James (Jianli) Zhang v Nepean Conveyors Pty Ltd
[2013] FWC 7876
•5 NOVEMBER 2013
[2013] FWC 7876 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr James (Jianli) Zhang
v
Nepean Conveyors Pty Ltd
(U2013/10402)
COMMISSIONER SPENCER | BRISBANE, 5 NOVEMBER 2013 |
Application for relief from unfair dismissal - jurisdictional objection - genuine redundancy.
Introduction
[1] This determination relates to an application made by Mr James Zhang (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 Nepean Conveyors Pty Ltd (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 matter was conciliated before a Fair Work Commission (FWC) Conciliator on 16 July 2013 but the matter did not settle.
[3] A Mention was held before the Commission on 22 August 2013. The matter was not able to be resolved. Directions were set for the filing of submissions and evidence in relation to the jurisdictional objection.i The parties consented to the jurisdictional objection being determined on the papers.
[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] 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.
[9] The relevant consideration in relation to the jurisdictional objection is s.385(d).
Summary of the Respondent’s Submissions and Evidence
[10] The Respondent submitted that the Applicant was not unfairly dismissed because the dismissal was a case of a genuine redundancy.
[11] Prior to his dismissal the Applicant was employed by the Respondent as a machinist.
[12] The Respondent submitted that the role that the Applicant performed prior to his dismissal will not be performed by anyone else in the business. Specifically, the Respondent submitted that the specific work that the Applicant performed is no longer available because of a “downturn in the market and industry and therefore we only needed 8 machinists instead of 11”.
[13] This submission should be considered in the context that the Respondent conceded that the work the Applicant was undertaking is still being performed by employees of the Respondent. However, the Respondent submitted that the number of positions performing this work has decreased.
[14] The Respondent provided submissions regarding the projected sales in the previous financial year (2012/2013) and the current financial year (2013/2014). These figures (which were served on the Applicant by the Respondent) show a decrease in projected sales of about one third from one financial year to the next.
[15] The Respondent submitted that this downgrading in sales projections has caused the Respondent to undertake a commensurate decrease in employee headcount, also by about 30%. This decrease was, it was submitted, because of the decreased sales projections and therefore changed operational requirements. The commensurate decrease in workforce has involved a restructure of the business to improve the efficiency of the Respondent’s operations.
[16] The Respondent submitted that the Applicant’s position has been redistributed amongst existing employees.
[17] The Respondent provided a breakdown of employees of the Respondent prior to, and following, the dismissal of the Applicant. This breakdown demonstrates that prior to the Applicant’s dismissal, the Respondent operated with 11 machinists, including the position the Applicant held. After the Applicant’s dismissal, the Respondent had 8 machinists. From an overall perspective, the total workforce of the Respondent decreased by 8 persons representing about a 28% overall decrease in workforce.
[18] The Respondent referred to some concessions made by the Applicant during the conciliation process. These concessions during conciliation have not been taken into account. It is however noted that much of the Respondent’s evidence regarding the downturn and reduced workforce numbers was not challenged at all by the Applicant.
[19] The Respondent submitted that a process of consultation on the necessary business restructure was engaged in by the Respondent, in accordance with the Manufacturing and Associated Industries and Occupations Award 2010 [MA000010] (the Award).
[20] Clause 9 of the Award as pertains to consultation, regarding major workplace change provides:
“9.1 Employer to notify
(a) Where an employer has made a definite decision to introduce major changes in production, program, organization, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.
(b) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.
9.2 Employer to discuss change
(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.
(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 9.1.
(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.”
[21] The Respondent submitted evidence of a tool box meeting delivered by the General Manager of the Respondent on 8 May 2013. The Applicant was present at that meeting. The Respondent submitted meeting minutes of the tool box meeting of 8 May 2013.
[22] Relevantly the minutes stated:
“We are reviewing workforce planning and it will be discussed on a personal basis. The downturn in the industry means the outlook for future project work is bleak. i.e. we need to manage our workforce numbers to suit the demands of our customers.
Ways we will survive during the down turn
- Some employees have been sent to Nepean Longwall temporarily
- Possibility of bringing everyone on to day shift
- Cut costs where possible to meet quoted job targets
- All jobs are to be treated as “rush jobs” meaning they need to be done in minimum amount of hours but also efficiently and safely
- Next 2-3 months jobs will be broken down into tasks so exact amount of time/cost spent on each task can be determined
- Initiatives for cost cutting to be issued at all levels
Looking into a way to book cleaning more effectively.”
[23] The Respondent submitted that there were no other opportunities for redeployment of the Applicant, within the Respondent’s business.
[24] The Respondent gave submissions in relation to the selection process for redundancies. The Respondent submitted that an objective review of all employees was undertaken by the Supervisors of the area in which the Applicant worked. This review assessed employees in a number of key performance areas.
[25] The Respondent submitted that the result of this process was that the Applicant was ranked within the bottom of his group. The other two employees which were made redundant from the Applicant’s area scored higher than the Applicant but lower than the remaining employees.
[26] The Respondent provided the individual assessment of the Applicant and the overall ranking of the 11 machinists, with the names of other employees removed. This confirmed that the Applicant’s overall rating (of 38 out of 54) was the lowest amongst the 11 machinists.
[27] The individual assessment of the Applicant showed that there were 10 areas or expectations for consideration in reviewing the Applicant. Of those 10 categories the Applicant achieved a score of “consistently exceeds expectations” in 6 categories. The Applicant achieved a score of “normally meets expectations” in 3 categories. The Applicant achieved a score of “needs improvement” in one category.
[28] The assessment further notes in other relevant factors “lazy, lacks initiative”.
[29] The Respondent submitted that no discrimination or unfair criteria were utilised or taken into account. The Respondent confirmed that it employs people from diverse backgrounds and is committed to equal employment opportunity and diversity.
[30] The Respondent submitted that the dismissal was a case of a genuine redundancy and the application should therefore be dismissed.
Summary of the Applicant’s Submissions and Evidence
[31] The parties were directed to file material pursuant to the Directions of 26 August 2013.
[32] The Applicant was directed to file material in reply to the jurisdictional objection by no later than 19 September 2013.
[33] By way of correspondence of 26 September 2013 Chambers notified the Applicant that no submission has been received in accordance with the Directions. This correspondence provided the Applicant with an opportunity to explain his failure to comply with the Directions. The correspondence also advised that if the Applicant failed to respond, or did not adequately explain any reasonable failure to comply with Directions his application may be dismissed for failure to comply or failure to prosecute the application. The correspondence also stated that failure to respond may mean the Commission considered that the Applicant did not wish to be heard in relation to the jurisdictional objection and a decision may issue on the material before the Commission.
[34] The Applicant responded to this correspondence on 27 September 2013.
[35] The reason given by the Applicant for failing to comply with the Directions is essentially that he “forgot to answer” the Directions. The Applicant stated that he had undertaken further training to assist him in finding alternative work in the three weeks prior to the email of 27 September 2013.
[36] The Applicant however did respond, in summary terms, to the performance review matrix relied upon by the Respondent.
[37] The Applicant submitted that the rating of “needs improvement” in relation to teamwork and the comment of “lazy, and lack initiative” were “not objective and fair”. Flowing from this submission the Applicant submitted that as this criteria was used to assess the Applicant’s performance then the selection for redundancy was not “objective and fair”.
[38] The Applicant submitted that in his opinion he gave the best assistance and cooperation for the company in that he did his job efficiently, safely and did not make mistakes. The Applicant stated that he always helped others wherever possible. The Applicant submitted that it would be unreasonable to expect him to report to his supervisor, who conducted the assessment, each and every time that he had helped somebody the demonstrate his teamwork.
[39] The Applicant stated that he considered he maintained the equipment and the general working environment better than the other employees of the Respondent. The reference in the Applicant’s assessment to “lazy and lack initiative” is a “personal abuse”.
[40] The Applicant’s general criticism of whether or not his dismissal was a case of genuine redundancy is that he believes the selection for redundancy was not “objective and fair” or “reasonable”. He does not challenge that the Respondent no longer required the work to be done by anyone or that he was consulted about the possibility of major workplace change, or that he was aware of this possibility.
Consideration
s.389(1)(a) - No longer required to be done
[41] 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
1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.
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.
1550. Paragraph 389(1)(b) provides that it will not be 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.
1551.Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
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...”
[42] The Applicant has not challenged the Respondent’s submission that they no longer required the work to be done by anyone. The Applicant did not challenge the material filed by the Respondent evidencing that there has been a reduction in machinists specifically, but also in the overall workforce of the Respondent.
[43] 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. 1i This is made clear by examples provided in the Explanatory Memorandum (extracted above).
[44] The Commission accepts the unchallenged evidence of the Respondent in this matter. The Respondent has undertaken a restructure or reorganisation of its operations which have resulted in a decrease in the number of machinists, of which the Applicant was one.
s.389(1)(b) - Consultation
[45] 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.” 2i
[46] The obligation to consult is to be discharged in accordance with the obligations in the provision of industrial instruments. The test in relation to consultation in this matter arises from Clause9 of the Award (extracted above).
[47] The Applicant did not submit that he was not aware that the Respondent was undergoing a review of its operations or that he was unaware of the circumstances requiring that review to take place.
[48] The Respondent has filed minutes of a tool box meeting, at which the Applicant was present. Those minutes record that employees were notified of the circumstances in which the Respondent was operating, and the effect that those circumstances were having on the Respondent’s business. The Respondent outlined multiple options which were being considered by the Respondent to help combat the effect of those circumstances. These responses included consideration of “workforce planning” and the need to “manage our workforce”.
[49] The Commission is satisfied that the Respondent has complied with the obligation in the Award to consult. One of the purposes of consultation provisions, is that employees are aware of major workplace change that will have a significant effect on their employment. The Applicant did not submit that he was unaware of the possibility that the changes proposed would have a significant effect on his employment.
s.389(2) - Redeployment
[50] In Ulan Coal Mines Limited v Honeysett and otheriv 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.” v
[51] 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...”vi
[52] The nature of the qualifications and experience held by the Applicant are important to determining the issue of redeployment. The Applicant, on the material, was a competent machinist in terms of his physical work output. On the material the Respondent’s business within which this work was being undertaken is experiencing some pressures in the current economic climate. The Respondent submitted that further to that the downturn in the Mining Industry has also affected the work of the Respondent’s business. The Respondent submitted that there was no other opportunity available for the Applicant.
[53] The Applicant stated in his response that he is currently undergoing further workplace training no doubt to assist him in seeking alternative employment. This training included forklift training. The Commission is satisfied that in all the circumstances, the Respondent was not able to redeploy the Applicant in the Respondent’s enterprise. No associated entity of the Respondent was identified.
Conclusion
[54] Where the Respondent raises a jurisdictional objection in a matter, the onus is on the Respondent to satisfy the Tribunal of their case.vii 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.viii
[55] The dispute between the parties, when viewed in the context of the submissions and material filed in this jurisdictional objection, is not a case where it was submitted by the Applicant that a redundancy was not justified, but instead is a case where the Applicant contends that he should not have been selected for redundancy.
[56] Based on the material provided, the Respondent has satisfied the Commission on the basis of the downturn in business and evidence regarding the resultant reduction in machinists 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.
[57] 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.
[58] I Order accordingly.
COMMISSIONER
1 It is noted that the Applicant required the assistance of an interpreter at both conferences before the Commission. The Commission undertook to translate Directions and the Respondent’s submissions in the matter wherever possible. After making inquiries the Commission was unable to engage a translator to translate the documents for the Applicant. The Applicant was however referred to the Translating and Interpreting Service for assistance on multiple occasions. The Applicant provided responses in accordance with the Directions for filing of materials.
i Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt [2010] FWA 674 at [27].
2 i [2010] FWAFB 3488 at [31].
i Printed by authority of the Commonwealth Government Printer
<Price code C, PR543030>
v [2010] FWAFB 7578.
v Ibid at [28].
vi Ibid at [30].
vii Crema and Others v Abigroup Contractors[2012] FWA 5322, Commissioner Cribb, at [81].
viii 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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