Mr Lito Aralar v Rio Tinto Aluminum Limited T/A Rio Tinto Alcan Gove Operations

[2014] FWC 7376

[2014] FWC 7376

FAIR WORK COMMISSION

DECISION

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

Mr Lito Aralar
v
Rio Tinto Aluminum Limited T/A Rio Tinto Alcan - Gove Operations
(U2014/1128)

COMMISSIONER SPENCER BRISBANE, 17 OCTOBER 2014

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

Introduction

[1] This decision relates to an application made by Mr Lito Aralar (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy alleging that the termination of his employment from Rio Tinto Pty Ltd (the Respondent) was harsh, unjust or unreasonable.

[2] The Respondent raised a jurisdictional objection in relation to the Applicant’s application that the termination of the Applicant’s employment was a genuine redundancy. This decision considers the jurisdictional objection only.

[3] Directions were issued for the filing of submissions in relation to the jurisdictional objection only. The Applicant and Respondent consented to the matter being determined on the papers. However, a conference was held in the matter to consider the submissions and evidence with the parties.

[4] The Applicant was self-represented. The Respondent was represented by Mr Michael Coonan and Ms Melissa Bostock, of Herbert Smith Freehills (by permission pursuant to s.596).

[5] While not all of the evidence and submissions in the matters is referred to in this decision all of such have been considered.

Relevant Legislation

[6] The application has been made pursuant to s.394 of the Act, which 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)...”

[7] Prior to considering the merits of the matter the Commission must decide those matters prescribed by s.396 of the Act as follows:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating 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.”

[8] There is no dispute that the application was filed within the time period prescribed. The Commission is satisfied that the application was made within the period required in s.394(2) of the Act.

[9] The Respondent has not raised any objection to the application on the basis of those matters set out in s.396(c) of the Act, being that the dismissal was consistent with the Small Business Fair Dismissal Code.

[10] The Respondent raised an objection to the Commission’s jurisdiction on the basis of the termination being a genuine redundancy. In accordance with s.396(d) the Commission must consider this matter prior to considering the merits of the application.

[11] A genuine redundancy is one within the meaning of s.389 of the Act which states:

“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.”

Background and Submissions

[12] The Respondent submitted that the Applicant’s dismissal was a case of genuine redundancy. The Applicant challenged this. The Applicant submitted that his employment was terminated by way of a termination letter dated 21 May 2014. The Applicant submitted that the termination was not due to a genuine redundancy as he submitted that he could have been appropriately redeployed.

[13] The Applicant was employed as a senior development chemist at the Gove operations of the Respondent. The Applicant is a registered chemist and his employment was covered by the Professional Employees Award 2010 (the Award).

[14] In November 2013, employees were notified that the employer had made a decision to suspend alumina production at the refinery and place the facility into care and maintenance.

[15] The material provided by the Respondent explains that prior to the curtailment announcement there were 1400 workers (including contractors) at the Refinery and Bauxite Mine, this was reduced to 350 workers, a reduction of 500 direct employees.

[16] The Respondent explained, in terms of section 389(1)(a), that the Applicant had been employed in the technical team specifically in the ‘Process Development Group’. The work of this group was to perform research to enhance future refinery process improvement. The Respondent submitted that a ‘curtailment decision’ was undertaken by the Respondent which resulted in there being no further need for the work that the applicant was currently undertaking. All of the employees within that group, including the Applicant, were no longer required to perform this work. The Respondent did not require any person to perform the Applicant’s job.

[17] Both parties conceded that in relation to the Applicant's job that section 389(1) was not in contention, that is, that the employer no longer required the Applicant's job to be performed by anyone, because of changes in the operational requirements of the employer’s enterprise. It was conceded that the employer had complied with the relevant consultation clause in the Modern Award, which applied to the employment, to consult about the redundancy.

[18] The issue in question by the Applicant, as part of the redundancy process, was in relation to the redeployment process.

[19] The Respondent conceded that the Applicant undertook some backfilling work in the laboratory; however, there was not enough work for him to perform on a full time basis. Contrary to the Applicant’s statement, this work did not extend beyond the initial redundancies. The Applicant sought redeployment.

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

[20] When 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...”

[21] The business case and discussions between the parties confirmed the basis for the resultant redundancy. On the basis of the material before the Commission, it is determined that the Respondent no longer required the Applicant’s job to be done by anyone, due to the operational changes to the Respondent’s business.

s.389(1)(b) - Consultation

[22] 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

[23] The obligation to consult is to be discharged in accordance with the obligations in the provision of relevant industrial instruments.

[24] Clause 9.1 of the Award states:

9.1 Consultation regarding major workplace change

(a) Employer to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, 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.

(ii) 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.

(b) Employer to discuss change

(i) The employer must discuss with the employees affected and their representatives ,if any, the introduction of the changes referred to in clause 9.1(a),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.

(ii) 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(a).

(iii) 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.

[25] The Respondent submitted that relevant consultation process included a number of steps, which included the Respondent’s communication one-on-one with employees and the provision of information to the employees about the retrenchment process.

[26] Ms Emma Murray, Northern Territory Human Resources Manager, detailed the steps of the consultation at [33] to [55] of her statement. There were a series of meetings and information advices to employees prior to and after the announcement.

[27] The material indicated that the employees, who elected to seek redeployment with another of the Respondent’s businesses, were required to express an interest for vacant roles in the businesses and participate in a selection process for the role.

[28] The submissions and evidence of the parties have been considered against the consultation obligation in the Award. The Respondent had discharged their consultation obligations in accordance with s.389(1)(a) and (b). The consultation process was not in contention, however, the Applicant objected to the redundancy process given he was not satisfied that he had been provided with an offer of redeployment he considered was satisfactory.

s.389(2) - Redeployment

[29] 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

[30] 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

[31] The Respondent's submissions addressed the relevant principles in relation to s.389(2) 5. The Respondent submitted that there is no requirement for an employer to redeploy an employee to any vacant position. The job must be suitable and the employee should have the skills and competence required to perform the job immediately or after a reasonable period of training. The consideration of the redeployment process requires an assessment of a number of factors including the nature of alternative positions, the qualifications required for those particular jobs, in comparison to the employee’s qualifications, experience and skills and the location of the job in relation to the employee’s residence and the remuneration on offer.

[32] In addition, whether an employee is required to compete with other applicants for an advertised vacancy is relevant, especially so in circumstances where a redundant employee may be required to compete for an advertised vacancy in an associated entity of the employer which is under the overall managerial control of the same or related employer.

[33] The Respondent also referred a range of factors which are relevantly identified in the decision of Ventyx Pty Ltd v Murray 6 (Ventyx) as to the reasonableness of an overseas redeployment as follows; the cost of re-location; the recruitment process taking place locally; and the business reasons for redeployment or demand for skills locally. Further, the Respondent referred to Roy v SNC-Lavalin Australia Pty Ltd7 as to whether the overseas entities have their own human resource functions, policies and procedures where there is no overriding central managerial control8. The relevance of these authorities to the redeployment exercise is recognised and these factors have been considered in the redeployment possibilities for the Applicant.

[34] In relation to a number of the positions that the Applicant applied for, with entities outside of Rio Tinto Alcan Bauxite and Alumina, in other Rio Tinto Group entities including overseas, the Respondent set out that these were not subject to the same managerial control of the Respondent. The Respondent submitted that, from an operational sense, these organisations operated entirely independently of the Respondent. It was submitted that these entities had separate management and human resources structures and accordingly, independent recruitment decisions.

[35] Ms Murray, on behalf of the Respondent, provided evidence in relation to the Respondent’s redeployment process 9. The Applicant and other employees were required to participate in the selection process to ensure each employee had the requisite skills and qualifications for alternative roles, and to ensure that the successful candidate was the most suitable for redeployment. The process also allowed applicants to highlight additional skills and qualifications the Respondent may not have been aware of.

[36] The Respondent provided assistance to the Applicant with redeployment applications by enabling him access to the Career Centre and Careers Fair to meet other potential employers and gain assistance with the recruitment process.

[37] The Applicant was also provided with details of the website which contained alternative positions where he could express interest. He was also provided with access to a redeployment advisor who assisted the Applicant and maintained contact in relation to the progress of his applications. The termination date of the Applicant was also extended to facilitate these alternative applications.

[38] Only three positions remained in the laboratory and the Applicant did not express an interest in these roles. The Applicant initially expressed an interest in the technician laboratory position at Yarwun but given the role was more junior then his, he withdrew his interest.

[39] Ms Murray confirmed that the recruitment process for overseas roles was similar to the domestic process except for Visa requirements.

[40] In general terms, Ms Murray stated that the Applicant was unsuccessful in his application for reasons including lack of experience/qualifications in comparison to other candidates, not meeting the criteria for the role or because the role was cancelled 10. Her evidence that was that only one chemist was successful in obtaining a role in the Gove future structure and the Applicant had not expressed an interest for this role.

[41] Ms Murray also detailed the logistics of the redeployment exercise. She stated that by 17 March 2014 approximately1406 applications from 264 Gove employees had been received for vacant roles in Rio Tinto and Rio Tinto Alcan. The Respondent emphasised that it had provided every assistance to the Applicant and other redundant employees to assist with redeployment where possible.

[42] The Respondent identified 12 roles across the Rio Tinto group that the Applicant had applied for:

• Senior Process Engineer with Pilbara Iron Company (Services) Pty Ltd in Nammuldi, Western Australia;



• Technician Laboratory with Rio Tinto Aluminium Limited in Yarwun, Queensland;



• Supervisor - Analytical Lab with Iron Ore Company of Canada in Labrador City, Canada;



• Process Engineer with Pilbara Iron Company (Services) Pty Ltd in Paraburdoo, Western Australia;



• Team Leader - Processing with Technological Resources Pty Limited in Brisbane, Queensland;



• Senior Chemist with Oyu Tolgoi LLC in Mongolia;



• Chemist with Kennecott Utah Copper LLC in Salt Lake, USA;



• Laboratory Operator with Pilbara Iron Company (Services) Pty Ltd in Paraburdoo, Western Australia;



• Metallurgist with Pilbara Iron Company (Services) Pty Ltd in Nammuldi, Western Australia;



• Quality Measurement Supervisor with Pilbara Iron Company (Services) Pty Ltd in Cape Lambert, Western Australia;



• Senior Advisor - Processing Operational Improvement with Technological Resources Pty Limited in Brisbane, Queensland; and



• Chemist with Rossing Uranium Limited in Namibia 11.

[43] The Respondent argued that it had gone beyond its obligations to support the Applicant in the applications for particular roles and went to great efforts to support the Applicant to attain redeployment. The Respondent relied on the decision of Ventyx to demonstrate that information provided by the Respondent in relation to these alternative roles elsewhere within the Rio Tinto group was not a required step in the redeployment process but additional to providing further assistance to employees to find alternative work and should not be assessed as a strict legal obligation under the Act 12.

[44] The evidence of Ms Murray provided reasoning in relation to the positions the Applicant sought redeployment to as listed above 13. By way of example, the Applicant applied for the senior chemist role at Oyu Tolgoi. The Respondent submitted that the Applicant’s suitability for the role was clearly considered and Ms Murray stated that the Respondent sought to ensure that the Applicant had preferential treatment. This included being considered for the role first and being interviewed first. However, Ms Murray states that the recruitment decision was made by the hiring lead and it was an essential requirement of the role that the successful applicant has experience in Copper refining and associated tasks. Ms Murray stated that the position went to a candidate who had extensive experience in Copper refining and smelting14.

[45] The Respondent stipulated that whilst it took steps to endeavour to have other Rio Tinto entities provide preference to redundant Gove employees for vacant roles, in practical terms, the Respondent was able to provide little control or influence over other entities’ recruitment decisions. The Applicant submitted that Rio Tinto (Corporate) had overall managerial control over its associated entities and suggested that if a request in relation to hiring policies had been made by the controlling entity, the outcome may have been different. Where the Respondent was able to exercise control, in making a role available to the Applicant at Yarwun, the Applicant decided not to agree to this role for reasons stated above.

[46] The reasons for the Applicant being unsuccessful in obtaining the alternative roles are clearly made out by the Respondent and were also discussed at the conference. On the material provided, it was not reasonable for the Applicant to be redeployed to such.

Conclusion

[47] Where the Respondent raises a jurisdictional objection, the onus is on the Respondent to satisfy the Commission of their case. 15

[48] The Respondent has established that the dismissal was a case of genuine redundancy and that appropriate consultation and explanations as to the redeployment queries were provided in the lead up to the decision with the Applicant. The Applicant was consulted. No persuasive argument for redeployment in rebuttal of the Respondent’s reasoning as to alternative positions was made out by the Applicant.

[49] On the basis of the facts of the matter, as per the evidence and submissions, the Applicant’s termination was a case of genuine redundancy in accordance with s.389(1) and (2) of the Act. The jurisdictional objection, that is, that the termination of employment was a genuine redundancy, is upheld and therefore, the Applicant was not unfairly dismissed.

[50] Accordingly, the Applicant’s application, filed pursuant to s.394 of the Act, is dismissed in accordance with s.389 of the Act.

[51] I Order accordingly.

COMMISSIONER

 1   [2010] FWAFB 3488 at [31].

 2   [2010] FWAFB 7578.

 3 Ibid at [28].

 4 Ibid at [30].

 5 Respondent’s submissions 19 June 2014 at [20].

 6   Ventyx Pty Ltd v Murray [2014] FWCFB 2143.

 7   [2013] FWC 7309 at [41] - [42].

 8   Respondent’s submissions 19 June 2014 at [20] subparagraph (h).

 9   Witness Statement of Emma Murray filed 19 June 2014 at [92] - [104].

 10 Witness Statement of Emma Murray filed 19 June 2014 at [100].

 11   Respondent’s submissions 19 June 2014 at [26] and Witness Statement of Emma Murray filed 19 June 2014 at [98].

 12   Ventyx Pty Ltd v Murray [2014] FWCFB 2143 at [160].

 13   Further Witness Statement of Emma Murray dated 10 July 2014 at [38] - [53].

 14   Further Witness Statement of Emma Murray dated 10 July 2014 at [45] - [49].

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

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