Mr Mario Kloczonek v Toll Energy Logistics Pty Ltd

[2015] FWC 607

[2015] FWC 607

FAIR WORK COMMISSION

DECISION

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

Mr Mario Kloczonek
v
Toll Energy Logistics Pty Ltd
(U2014/8183)

COMMISSIONER CLOGHAN PERTH, 26 OCTOBER 2015

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

[1] Mr Mario Kloczonek (Mr Kloczonek or Applicant) has made application to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from his former employer, Toll Energy Logistics Pty Ltd (Toll or Employer).

[2] The application was made pursuant to s.394 of the Fair Work Act 2009 (FW Act).

[3] In response to the application, the Employer asserts that:

• the Applicant is not protected from the unfair dismissal provisions of the FW Act as his dismissal was a case of genuine redundancy.

[4] To assist in the determination of whether Mr Kloczonek’s dismissal was a case of genuine redundancy, I issued Directions and advised the parties that I intended to deal with the matter by way of written submission. In addition, each party had the opportunity to challenge the submissions or witness statements in a hearing.

[5] Both the Applicant and the Employer requested a hearing.

[6] At the hearing, the Applicant was represented by Mr K Sneddon, Lawyer, Construction, Forestry, Mining and Energy Union (CFMEU) Western Australia. Mr Kloczonek gave evidence on his own behalf.

[7] The Employer was represented by Ms C Vinciullo of counsel. Ms G Withers, National Human Resources Manager, gave evidence on behalf of the Employer.

[8] This is my decision and reasons for decision on whether the Applicant’s dismissal is a case of genuine redundancy, and therefore, not protected by Part 3-2 Unfair dismissal provisions of the FW Act.

RELEVANT STATUTORY FRAMEWORK

[9] Section 385 of the FW Act sets out the meaning of unfair dismissal as follows:

“(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.”

[10] The meaning of genuine redundancy is contained in s.389 of the FW Act as follows:

“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.”

[11] Shortly put, where it is found that a dismissal is a genuine redundancy, it is not an unfair dismissal.

APPLICANT’S CASE

[12] The Applicant’s case is succinctly put, in his outline of submissions, as follows:

“...the Respondent, in their outline of submissions, go into some detail of defending matters which have not been claimed by the Applicant. The Application makes clear that this was not a genuine redundancy because it would have been reasonable in all the circumstances for the Applicant to be redeployed within the Respondent’s enterprise or that of an associated entity. Regardless of whether the job was no longer required, or whether consultation obligations had been complied with, if the FWC finds with the Applicant on there being a reasonable redeployment opportunity, then the dismissal cannot be said to have been a genuine redundancy and there can be no substance to the jurisdictional objection” 1 (my emphasis).

[13] Put plainly, the Applicant submits that there is a “two part test”. Firstly, whether on the balance of probabilities, a position or positions were available within the Employer’s enterprise, or associated entities. Secondly, if there were positions available, whether or not, it would have been reasonable in all the circumstances to redeploy Mr Kloczonek into a position.

EMPLOYER’S CASE

[14] The Employer’s case is that on 18 and 19 June 2014, it considered all reasonable opportunities within its enterprise and associated entities which Mr Kloczonek could be redeployed into. The Employer identified two potential positions. However, its review of the inherent requirements of the positions revealed that the Applicant did not have the requisite minimum qualifications. Consequently, Mr Kloczonek was advised on 19 June 2014 that his employment was terminated for reasons that the position he occupied had been abolished.

[15] The Employer also submitted that the Commission is required to consider all the circumstances when determining the reasonableness of whether Mr Kloczonek could have been redeployed.

RELEVANT BACKGROUND

[16] The Applicant commenced employment with the Employer on 13 June 2011.

[17] The Employer is engaged to perform transport and logistical services on Barrow Island as part of the Gorgon Project (Gorgon Project) for the Kellogg Joint Venture Gorgon (KJVG).

[18] The Applicant’s conditions of employment were regulated, in part, by the Toll Energy BWI Project Construction Agreement 2009 Employee Collective Agreement (BWI Project Collective Agreement).

[19] The BWI Project Collective Agreement provides for one classification of employee - “Supply Base Operator” (SBO). The position of SBO has eight (8) levels. Each level has a brief description of tasks/range of work/competencies.

[20] The nature of the contract between the Employer and KJVG includes a provision which enables KJVG to direct the Employer to demobilize its employees from Barrow Island.

[21] From December 2013 to February 2014, the Employer arranged for its Gorgon Project employees on Barrow Island, to attend compulsory “town hall” sessions. The purpose of the sessions was to discuss with the workforce on Barrow Island, issues regarding the future reduction of the Employer’s workforce. Mr Kloczonek attended a meeting on 1 December 2013.

CONSIDERATION

[22] The meaning of genuine redundancy in the FW Act has three statutory “tests”. The first test is whether the employer no longer required the person’s job to be performed by anyone because of the requirements of the business.

s.389(1)(a) - The person’s employer no longer required the person’s job to be performed by anyone because of changes in operational requirements of the employer’s enterprise

[23] The Explanatory Memorandum to the Fair Work Bill 2008 (Explanatory Memorandum) provides guidance regarding changes to the operational requirements of an enterprise which will lead to a genuine redundancy at paragraph 1547. Paragraph 1547 reads:

“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.”

[24] Having considered the guidance provided by the Explanatory Memorandum, I find, on undisputed evidence, that the condition required in s.389(1)(a) of the FW Act is met. The Employer no longer required the position occupied by Mr Kloczonek to be performed by a discrete person because of changes in the operational requirements of the business. As a consequence, Mr Kloczonek was dismissed on the grounds of genuine redundancy.

[25] The Applicant did not press that the test in paragraph 389(1)(a) for a genuine redundancy, was not met by the Employer. 2

[26] It is necessary to consider the remaining two “tests”.

s.389(1)(b) – Has the employer complied with any obligation in a modern award, or enterprise agreement that applied to the employee to consult about the redundancy?

[27] Toll asserts that it had no obligation to consult with Mr Kloczonek about the redundancy, pursuant to a modern award or enterprise agreement. However, despite no obligation, the Employer conferred with its workforce on Barrow Island about an impending direction from KJVG to reduce employees on the Island, due to winding down of the construction phase of the Project. 3

[28] The Applicant, in reply, asserts that pursuant to Clause 7 of the BWI Project Collective Agreement, the Employer “commits to consultation”. 4

[29] Clause 7 of the BWI Project Collective Agreement reads:

“7. PROJECT CONSULTATION AND COMMUNICATION ARRANGEMENTS

To help achieve a harmonious working relationship and to ensure that the program set for the Project is maintained, the Company and employees are committed to open and ongoing consultation to ensure that the work on the Project is undertaken in the most safe and productive manner and to the highest quality standards.

Regular communication and consultation processes and forums will be established in support of a well-informed and purposeful project workforce. Good team work and strong relationships between teams will help ensure excellent progress through the project work schedule.”

[30] I am satisfied that the Employer’s obligation to consultation is to, “ensure that the work on the project is undertaken in the most safe and productive manner and to the highest quality standards”.

[31] I find that there is no obligation to specifically consult about redundancies pursuant to the BWI Project Collective Agreement. In any event, should I be wrong, I am satisfied that consultation did occur by way of the “town hall” meetings.

[32] Mr Kloczonek did not submit, nor is there any evidence that a modern award applied to his employment with attendant obligations to consult about redundancies.

s.389(2) – Was it reasonable in all the circumstances for Mr Kloczonek to be redeployed within the Employer’s enterprise or associated entities (if any)?

[33] On 17 June 2014, the Employer was directed by KJVG to permanently reduce its workforce on Barrow Island in accordance with the operational requirements of the Project.

[34] On 18 June 2014, the Employer notified, by group text message, the Applicant and other Gorgon Project employees on Barrow Island, that KJVG had directed it to reduce its workforce from 259 to 250 employees. The KJVG direction to the Employer was that downsizing was to take effect immediately.

[35] The Employer identified one Warehouse SBO position to be made redundant. The Employer submits that Mr Kloczonek was one of six (6) employees working as a Warehouse SBO at the Barrow Island site. The Applicant submits that he was one of 11 employees working in the warehouse at the time of his cessation of employment.

[36] The Employer made an assessment of the skills and experience of the warehouse employees and determined that the Applicant’s position would be abolished. The Applicant asserts that other employees had less skills and experience and he was the only person with “HC”, “DG” and “First Aid” licences.

[37] Having identified Mr Kloczonek’s position to be abolished, Ms Withers reviewed all “Toll Energy and greater Toll Group positions that were available to see if the Applicant could be redeployed” 5.

[38] Ms Withers identified two (2) potential positions which may have been suitable to redeploy Mr Kloczonek into. Having reviewed the positions, Ms Withers determined that the two potential positions were unsuitable for Mr Kloczonek.

[39] On 19 June 2014, the Applicant received a telephone call from Mr Hanna as he was not on Barrow Island. The Applicant was advised that: the Employer had been directed to reduce its employee levels on the Gorgon Project; the position he occupied had been abolished; Toll had been unable to find a suitable comparative role which he could be redeployed into (which is denied by the Applicant) and he was welcome to apply for any future positions. The content of the telephone discussion is in dispute.

[40] During the telephone conversation, the Applicant sought for his severance payment to be paid in the next financial year.

[41] Put simply, the abolition of Mr Kloczonek’s position and advising him of this, occurred in a brief period of time for operational reasons.

[42] Mr Sneddon directed the Commission to Technical and Further Education Commission T/A TAFE NSW v L Pykett[2014] FWCFB 713 (Pykett) and what he describedas the “two tests” of s.389(2) of the FW Act. That is, on the balance of probabilities, there was a job or position available. And secondly, whether it was reasonable, in all the circumstances, to redeploy the employee into a position if it was available.

[43] Ms Withers gave evidence that she:

• accessed all the Employer’s relevant recruitment databases and search engines, to see what positions were available to potentially redeploy the Applicant into; and



• accessed the Employer’s recruitment team who confirmed what positions were available to which Mr Kloczonek could potentially be redeployed into.

[44] In my view, all of these actions, objectively, are consistent with the expression “canvass” in Pykett at paragraph [37]. The Employer simply checked what available positions which potentially Mr Kloczonek could be redeployed into on 18 and 19 June 2014.

[45] Ms Withers determined two potential positions may have been suitable to deploy Mr Kloczonek into; they were:

• Multiple Combination (MC) Dangerous Goods Driver (Toll Mining Services West-Perth); and



• Dangerous Goods (DG) Driver (Toll Mining Services South-Matraville NSW).

[46] The fact that the Employer identified the two positions in paragraph [45] is demonstrative that the positions were available and, in my view, satisfies the “first test” described by Mr Sneddon in Pykett. I now turn to the second test and whether it was reasonable, in all the circumstances, for the Employer to redeploy Mr Kloczonek into one of the positions.

[47] The commencing point for consideration is always the words of the legislation. The Australian Concise Oxford Dictionary (ACOD) defines “reasonable” as “sensible”, “sound”, “within the limits of reason” and “not greatly less or more than might be expected”. The ACOD also defines “all” as “the whole amount”, “greatest possible” or “extent of”.

[48] When Ms Withers investigated the two potential positions, specific driving licenses were required for both; MC and DG licenses. Ms Withers’ review of the licenses held by the Applicant revealed that he did not possess either licence. 6

[49] The Applicant concedes that he does not have a MC licence 7 but he does possess a DG licence which was due to expire on 21 July 2014.8

[50] I turn firstly to the Dangerous Goods Driver position in Sydney. While I am satisfied that Mr Kloczonek has a DG license - having a DG license is not the determinative factor of whether it would be reasonable, at the time of his dismissal, to redeploy Mr Kloczonek into the position.

[51] Further, I have no reason to disbelieve Ms Withers when she states that the Employer was seeking experienced DG drivers.

[52] The position of DG Driver is in Sydney, not Perth where Mr Kloczonek lives. The position was not “fly-in, fly-out”. Mr Kloczonek would have had to relocate to Sydney with the attendant dislocation.

[53] For reasons of a purported lack of qualifications, that it was not a FIFO position, the need for an “experienced” driver and that the position was in Sydney NSW, I am satisfied that the conclusion reached by the Employer was within the range of what was reasonable. The Employer’s conclusion did not fall outside what would ordinarily be described as reasonable, that is, being “sensible”, “moderate” and “in accordance with reason”. 9 I am comforted in reaching this conclusion by Mr Kloczonek’s witness statement in which he states that this was a position he “certainly” would have “considered”, “as I had been working on a FIFO basis, I would have looked at any job opportunity Australia wide”. 10

[54] To “consider” accepting a position is meaningless and an easy claim to make retrospectively. Evidence of an employee who is prepared to ponder over a position in Sydney, is a low threshold to determine whether or not an employer has met the statutory requirement of reasonableness. Similarly, the relationship between working on a FIFO basis and “looking at” job opportunities elsewhere in Australia, attempts to make a connection between both, where none probably exists. An employee working under a FIFO arrangement, is different to being prepared to look at a “job opportunity” which requires the employee to reside in the city of their employment, and commute daily.

[55] It is true that, in the case of the DG Driver’s position, the Employer came to the wrong conclusion regarding Mr Kloczonek not having a DG licence. However, on the basis of what was known to Ms Withers at the time, she made a reasonable conclusion regarding the suitability of redeploying Mr Kloczonek into the DG Driver’s position.

[56] With respect to the MC Dangerous Goods Driver’s position, the Employer’s assessment revealed that Mr Kloczonek did not possess a MC licence and in any event, Toll was seeking experienced MC drivers. For these reasons, the Employer came to the assessment that it was reasonable not to redeploy Mr Kloczonek into that position. I am not persuaded, having taken into all the circumstances, the Employer’s decision was unreasonable and find accordingly.

[57] It is not disputed that the Employer did not raise these two potential positions with Mr Kloczonek on 19 June 2014 in his telephone conversation with Mr Hanna. It could be argued that not raising the potential redeployment positions with Mr Kloczonek, means that the process of redeployment consideration is defective, and consequentially, it was reasonable to deploy Mr Kloczonek into one of the positions. I am not persuaded by such an argument – the Commission is required to consider “all the circumstances” notwithstanding any perceived or real deficiencies. In the case of redundancies, it is always a “balancing act” whether to put to employees (at the time he or she is being dismissed) potential redeployment positions which, in this case, may pay less, the employee does not have the minimum qualifications, it is not a FIFO position and required relocation to another state and raise their ire, or provide a neutral statement to the effect of “there are no suitable available positions”.

[58] I now turn to Mr Kloczonek’s evidence that his search of the SEEK job site revealed far more positions being advertised by the Employer that he “was capable of filling”. 11 Mr Kloczonek does not identify the positions or why he was capable of filling them. Ms Withers’ evidence is simply that such evidence as to what was on SEEK, is not accurate and reflective of what positions are actually available for employment. I am satisfied with the veracity of Ms Withers’ evidence, that the Employer’s “Career Corner” is the best listing of current available positions.

[59] With respect to the 24 June 2014 listing of vacancies provided to Mr Kloczonek, Mr Kloczonek states that “there were several jobs I was qualified to do and two of the jobs were in the same position as I had just been made redundant from. On viewing this list I saw that several of the jobs I could have done straight away with no retraining”. 12

[60] It appears that Mr Kloczonek has provided this evidence to demonstrate that, the Employer did not reasonably redeploy him into a position. Mr Kloczonek provided no evidence of any further consideration he made into these positions he allegedly was qualified for and could have done straight away. It is worth noting that the two SBO positions were in Darwin and “residential” positions. The “residential” requirement was applicable to all 10 positions and the position in South Australia was FIFO, South Australia only.

[61] While the Employer has acknowledged shortcomings in its process of considering redeployment options, I find that even after these shortcomings are considered, it was not reasonable, in all the circumstances, to redeploy Mr Kloczonek within its enterprise and associated entities.

[62] In summary, I find that the Employer:

• took action to identify potential positions into which Mr Kloczonek could be redeployed;



• wrongly determined that he did not have the minimum qualifications of a DG licence for one of the positions;



• the information on which it determined that Mr Kloczonek did not have a DG licence came from an appropriate source – the training department;



• for whatever reason, the data did not reveal that Mr Kloczonek had a DG licence. I have no reason to believe that the lack of information was deliberate; it just was not recorded;



• in any event, for reasons outlined above, on the balance of probabilities, it would not have been reasonable in all the circumstances to redeploy him into the DG Driver position;



• Mr Kloczonek did not have the necessary minimum qualification for the MC Driver’s position, and in any event, the Employer was seeking an experienced driver; and



• Toll’s decision not to redeploy Mr Kloczonek into the MC Dangerous Goods Driver’s position was within a range of reasonableness in all the circumstances.

[63] All of these factors demonstrated the reasonableness of the Employer’s consideration in determining whether Mr Kloczonek could be redeployed into another position.

CONCLUSION

[64] For the above reasons, I am satisfied and find that Mr Kloczonek’s dismissal was a case of genuine redundancy and accordingly, is not unfair pursuant to s385 of the FW Act. Accordingly, the application must be dismissed. An Order dismissing the application is attached to this Decision.

COMMISSIONER

Appearances:

K Sneddon, Lawyer, CFMEU on behalf of the Applicant.

C Vinciullo of counsel for the Respondent.

Hearing details:

2014:

Perth,

18 September.

 1   Applicant’s outline of submissions – paragraph 9

 2   Transcript PN619

 3   Exhibit R1 (15) and (16)

 4   Exhibit A2 (15)

 5   Exhibit R2

 6   Exhibit R2 (29-31)

 7   Transcript PN85

 8   Exhibit A3 (8)

 9   Australian Concise Oxford Dictionary

 10   Exhibit A3 (21)

 11   Exhibit A3

 12   Exhibit A3 (20)

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