Mr Michael Sedlarevic v Neville Smith Forest Products

[2015] FWC 4581

[2015] FWC 4581

FAIR WORK COMMISSION

DECISION

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

Mr Michael Sedlarevic
v
Neville Smith Forest Products
(U2015/785)

VICE PRESIDENT WATSON MELBOURNE, 10 JULY 2015

Application for relief from unfair dismissal – whether genuine redundancy – Fair Work Act 2009 ss.385, 389, 394, 396.

[1] This decision, edited from a decision on transcript on 7 July 2015, concerns an application for unfair dismissal remedy by Mr M. Sedlarevic pursuant to s.394 of the Fair Work Act 2009 (the Act). The application concerns the termination of Mr Sedlarevic’s employment as Victorian sales manager with Neville Smith Forest Products.

[2] The case has given rise to essentially two major issues because the employer contends that the termination was on account of a genuine redundancy within the terms of section 389 of the Act, and Mr Sedlarevic resists that contention and submits that the termination in all the circumstances was harsh, unjust or unreasonable.

[3] Section 396 of the Act requires me to determine whether the dismissal was a case of genuine redundancy before considering the merits of the application. The first question I need to determine is whether the termination was a genuine redundancy. That term is defined in s.389 of the Act. It has a number of elements and it provides that a dismissal is a case of genuine redundancy if 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 the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment, to consult about the redundancy. Further, s.389(2) provides that 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 the employer's enterprise or the enterprise of an associated entity of the employer.

[4] The evidence that has been led in this matter and directly from Mr Last as the director responsible for the timber side of the business, explained that it had been decided to cease employing a Victorian sales manager because the original intent behind the decision to initiate such a position was considered to be a flawed business strategy.  That conclusion was reached without any blame on the incumbent Mr Sedlarevic who had been employed in that role since early in 2014.

[5] The notion involved was that it was the original intent to have a sales role focused on smaller customers as distinct from wholesalers and the largest customer Bunnings, and to attempt to expand the business from a Victorian based sales manager into those potential customers.  It was decided late in 2014 that that strategy was not working and it was decided to cease to have a Victorian sales manager, and to have those functions of sales to wholesalers performed by Tasmanian based sales managers, who could service Victorian customers in conjunction with other customers elsewhere.

[6] The other work that had been done in relation to small customers was essentially not pursued and the work in relation to Bunnings was revised and as I will come to shortly, a new role was established with a different focus to the Victorian sales manager position.

[7] There could be debate about the business rationale, the wisdom behind the original decision and the overall circumstances and the sales performance about those matters, but I am satisfied that the decision that was made by the company to no longer pursue smaller customers and no longer employ a Victorian sales manager was a genuine business decision, based on business grounds. It involved no criticism of the performance of Mr Sedlarevic, and did not arise from any fault on his part.

[8] If there is to be any fault arising from those circumstances I think it was largely admitted by Mr Last that the strategy behind the appointment was not a sound one.  That strategy was changed and in my view the employer did no longer require the Victorian sales manager job to be performed by anyone.  That is not to say there were certain duties that were ongoing but not through the holder of a position of Victorian sales manager.

[9] I find in the circumstances and on the evidence that the employer, Neville Smith Forest Products, no longer required Mr Sedlarevic's job to be performed by anybody and that was essentially the reason for the dismissal.

[10] The next element of the definition of genuine redundancy is whether the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.  It appears that the role of Victorian sales manager is award free.  It is not a role which is involved in primarily visiting customers' premises and selling.  It is a role which had a Victorian presence, it involved a combination of techniques to contact clients. Mr Last explained that the major technique would have been by telephone, and Mr Sedlarevic performed his duties largely from home.

[11] I consider in the circumstances that there is no modern award or enterprise agreement that applied to Mr Sedlarevic's employment and there is no obligation to consult about redundancies arising from any award obligation. Section 389(1)(b) does not apply in the circumstances of this case.

[12] The next issue that needs to be considered is whether it would have been reasonable in all the circumstances to redeploy Mr Sedlarevic in the new role which is continuing, which is primarily a merchandising manager role in relation to Bunnings.  The evidence of Mr Last is that there is a new business requirement identified to focus on merchandising, from a retail perspective, of the company's products within Bunnings' operations. It was important to have someone with the necessary skills and experience in that role, which Mr Last considered to be quite different to a sales role, to perform that new role.

[13] Mr Last gave evidence about a consideration of Mr Sedlarevic for that role based on his knowledge of Mr Sedlarevic's strengths and weaknesses. He considered that Mr Sedlarevic was not suitable for that role and it would be necessary to employ a new employee for that role.  Mr Last admitted that he did not discuss this potential role with Mr Sedlarevic and also admitted that there may have been factors that arose from any discussions, if he had them, that could have contributed to his decision.

[14] Nevertheless, he believes that he made the correct decision based on his assessment of Mr Sedlarevic's skills and the different needs of the new position, and that it was soundly based on an assessment of skills and a need to have an effective person in that new merchandising role.

[15] Mr Sedlarevic has a different view and gave different evidence about his potential ability to perform that role. He contends that if there had have been consultation about that matter perhaps a different conclusion may have been reached.

[16] This is a difficult question for me to determine but I am not satisfied that it would have been reasonable to redeploy Mr Sedlarevic in that role.  I consider that Mr Last's approach in endeavouring to find an appropriate person with the precise skills required and the retail focus was a genuine attempt to make that position work. He also took into account the possibility of Mr Sedlarevic performing that role and made an assessment, rightly or wrongly, about the need to employ a different person to Mr Sedlarevic because of the differences in the positions, and essentially the assessment that Mr Sedlarevic was a sales professional and that the role was a merchandising role, from a retail perspective.

[17] I am not satisfied that it would have been reasonable in the circumstances to redeploy Mr Sedlarevic in that role. The employer has made an assessment which I believe was genuinely based and fairly considered the relevant skills of the alternative contenders.

[18] Section 389 is a matter of strict technicalities, I need to make findings of fact relating to the elements of that section. I have made those findings and the determination of whether a dismissal is unfair involves the Commission being satisfied of a number of things. One of those matters in s.385 is that the dismissal was not a case of genuine redundancy. The findings I have made lead to the conclusion that the dismissal was a case of genuine redundancy. Therefore the dismissal was not an unfair dismissal and that conclusion arises regardless of a question of the overall circumstances—the merits and the question of whether the dismissal was harsh, unjust or unreasonable.

[19] That second question, whether the dismissal was harsh, unjust or unreasonable does not arise in this case, given the conclusion I have reached that the dismissal was a case of genuine redundancy. I dismiss the application.

VICE PRESIDENT

Appearances:

Mr M. Sedlarevic on his own behalf.

Mr K. Last on behalf of Neville Smith Forest Products.

Hearing details:

2015.

Melbourne.

7 July.

Final written submissions:

Neville Smith Forest Products submissions on 11 June 2015.

M. Sedlarevic submissions in response on 15 June 2015.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR569144>