Mr Nigel Whiteside v G. James Glass and Aluminum (Qld) Pty Ltd

[2012] FWA 3580

[2012] FWA 3580

FAIR WORK AUSTRALIA

DECISION

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

Mr Nigel Whiteside
v
G. James Glass and Aluminum (Qld) Pty Ltd
(U2011/1914)

Mr Vincent Nicklin

v
G. James Glass and Aluminum (Qld) Pty Ltd
(U2011/1915)

COMMISSIONER CAMBRIDGE SYDNEY, 1 MAY 2012

Alleged unfair dismissals - alleged genuine redundancies - challenge as to whether employer had complied with obligations of industrial instrument - ss. 385, 389, and 396 of Fair Work Act 2009 - initial matter to be determined - no obligation in Agreement to consult - genuine redundancy established - claims dismissed.

[1] These matters involve applications for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009, (the Act). The applications were lodged at Brisbane on 19 September 2011. The application in matter U2011/1914 was made by Nigel Whiteside, (Whiteside) and in matter U2011/1915 by Vincent Nicklin (Nicklin). Whiteside and Nicklin have been referred to jointly as the applicants. The two applications proceeded concurrently and were formally joined at the outset of the Hearing. The respondent employer has been identified as G. James Glass and Aluminum (Qld) Pty Ltd(the employer).

[2] The applications indicated that the date of the applicants’ dismissals was 7 September 2011. Consequently the applications were made within the 14 day time limit prescribed by subsection 394 (2) of the Act. Conciliation of the claims was unsuccessful and the matters proceeded to arbitration before Fair Work Australia (FWA) in a Hearing conducted in Brisbane on 17 February and 23 March 2012. At the conclusion of the Hearing on 23 March, the Parties were provided with a timetable for the provision of further submissions which culminated with material from the applicants’ representative, the Construction, Forestry, Mining & Energy Union, Construction and General Qld/NT Branch (CFMEU) provided on 10 April 2012.

[3] At the Hearing the applicants were represented by Mr T O’Brienfrom the CFMEU. The applicants were each called as witnesses to provide evidence in support of the claims. The employer was represented by Mr C Banan in-house lawyer for G James Group of Companies. Mr Ban attempted to call the employer’s Gold Coast Branch Manager, a Mr G J Holmes as a witness. On the evening prior to the first scheduled day of Hearing, Mr Holmes suffered a debilitating personal injury which has precluded him from being able to give evidence. In due course and subject to relevant cautionary limitations and other qualifications the affidavit of Mr Holmes was admitted into evidence.

Relevant Factual Background

[4] The applicant Nicklin had worked for the employer for approximately 1 year and 8 months and the applicant Whiteside for over 18 years. The applicants both worked as glaziers. The applicants worked as onsite daily hired employees engaged on construction sites primarily at locations in the vicinity of the Gold Coast, Queensland. At the time of the applicants’ dismissals the employer had approximately 62 employees engaged from its Gold Coast Branch.

[5] On 7 September 2011 the applicants were called into a meeting with the employer’s Gold Coast Branch Manager, Mr Holmes. Mr Holmes told the applicants that they were each dismissed from employment on account of redundancy. The applicants had not been given any prior formal advice of their redundancy. However each of the applicants had heard rumours about possible redundancy and each, without the knowledge of the other or that of Mr Holmes, secretly made audio recordings of the discussion that occurred during the meeting held on 7 September.

[6] Subsequently the applicants advised the CFMEU of the circumstances of their dismissals and the CFMEU lodged applications for unfair dismissal remedy in respect of each individual.

The Applicants’ Case

[7] Mr O’Brien, from the CFMEU, submitted that the determination of the applicants’ unfair dismissal claims centred upon the employer's failure to consult with the applicants in respect to the termination of employment. Mr O'Brien submitted that the employer was required to consult with the applicants and has simply failed to do so.

[8] Mr O'Brien said that it was clear from the evidence of both applicants that there was no consultation prior to the meeting of 7 September 2011 during which the applicants were dismissed. Consequently, according to the submissions of Mr O’Brien the absence of any consultation meant that the applicants were denied any opportunity to influence the outcome.

[9] Mr O'Brien further submitted that as the employer had not met its obligation to consult with the applicants there could be no alternative but to find that their dismissals were unfair, harsh or unreasonable. Mr O'Brien submitted that as remedy for the applicants unfair dismissals payment of compensation of an amount of nine weeks pay for Nicklin and seven weeks pay for Whiteside would be appropriate.

[10] In response to further submissions that were made on behalf of the employer, Mr O'Brien made submissions regarding whether the dismissals of the applicants could be held to be genuine redundancies for the purposes of section 389 of the Act. These further submissions specifically dealt with the issue as to whether subsection 389(1) (b) of the Act had application to the circumstances of the applicants.

[11] In brief, the further submissions made by Mr O'Brien identified various industrial instruments which may have applied to the employment of the applicants. In respect to these various industrial instruments Mr O'Brien submitted that the employer had not complied with any obligation to consult about the redundancies of the applicants. The various industrial instruments referred to by Mr O'Brien included: the Glass Industry Award (Qld) 1993 (the State Award); the G James Glass and Aluminium (Qld) Pty Ltd union collective agreement 2006 (the 2006 Agreement); the Joinery & Building Trades Award 2010 [MA000029] (the Joinery Modern Award); and the G James Australia Pty Ltd Enterprise Agreement 2010 (the 2010 Agreement).

[12] The further submissions made by Mr O'Brien referred to numerous clauses contained within the various industrial instruments, each of which he submitted established an obligation for the employer to consult with the applicants about their redundancy. Consequently according to the submissions of Mr O'Brien, the employer had not complied with any consultation obligation arising from the provisions of the various industrial instruments to which he referred. Mr O'Brien submitted that the applicants’ dismissals were not cases of genuine redundancy as the provisions of subsection 389(1) (b) of the Act had not been satisfied.

[13] In summary, Mr O'Brien stated that the dismissals of the applicants were not cases of genuine redundancy because the employer had not complied with the Award or Agreement obligations regarding consultation about redundancy. Further, Mr O'Brien submitted that the absence of consultation provided sound basis for a finding that the applicants’ dismissals were unfair and remedy by way of monetary compensation should be made.

The Employer’s Case

[14] Mr Ban, who appeared for the employer, submitted that the unfair dismissal claims of the applicants had been narrowed to a determination as to whether the dismissals represented cases of genuine redundancy under section 389 of the Act.

[15] Mr Ban referred in detail to the Decision of Hampton C. in the case of TG V SF Pty Ltd  1 (TG). Mr Ban submitted that the circumstances in the TG case were very similar to the position of the applicants. In particular Mr Ban reiterated extracts from the Explanatory Memorandum in relation to the Fair Work Bill 2008 (the explanatory memorandum) which had been included in the Decision in TG. In reference to subsection 389(1) (b) of the Act Mr Ban stressed the contents of paragraph number 1550 of the explanatory memorandum.

[16] Mr Ban noted that paragraph 1550 of the explanatory memorandum mentioned that subsection 389(1) (b) of the Act did not impose an absolute obligation on an employer to consult about redundancy but required that the employer fulfil obligations under an Award or Agreement if the dismissal was to be considered a genuine redundancy. Further, Mr Ban submitted that the Agreement which applied to the work of the applicants was the 2006 Agreement and that Agreement did not contain a provision which obliged the employer to consult with daily hire employees who were terminated on account of redundancy.

[17] Mr Ban submitted that the only issue to be determined was whether the redundancies of the applicants, as daily hire construction workers, were genuine redundancies which satisfied the requirements of section 389 of the Act. Mr Ban said that the determination of this question had been greatly narrowed by the withdrawal of a witness statement of Jade Ingham. Mr Ban submitted that the provisions of the 2006 Agreement did not establish any obligation on the employer to consult with daily hire employees who were made redundant.

[18] In summary,Mr Ban stated that the dismissals of the applicants were cases of genuine redundancy which satisfied the meaning of genuine redundancy as set out in section 389 of the Act. Consequently, according to Mr Ban, subsection 385 (d) of the Act operated in the case of the applicants and therefore their unfair dismissal claims had no jurisdiction and should be dismissed accordingly.

Consideration

[19] Section 385 of the Act stipulates that FWA must be satisfied that 4 cumulative elements are met in order to establish an unfair dismissal. These elements are:

(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.

[20] In this case it was ultimately identified that the determination of the claims for unfair dismissal remedy was primarily founded upon a determination of that element contained in subsection 385 (d) of the Act. Specifically, the claims would turn upon a finding as to whether the dismissals of the applicants were or were not cases of genuine redundancy. Only if the dismissals were found not to be cases of genuine redundancy would then the other elements of section 385 require consideration.

[21] Further, section 396 of the Act establishes that FWA must determine, inter alia, whether the dismissals were cases of genuine redundancy as an initial matter before any consideration of the merits of the applications. Consequently the contest about the alleged genuine redundancy of the applicants has required determination as a pre-requisite to any subsequent considerations.

[22] Section 389 of the Act is entitled “Meaning of genuine redundancy” and is in the following terms:

“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.”

[23] The contest regarding whether the dismissals of the applicants were cases of genuine redundancy specifically focussed upon subsection 389(1) (b) of the Act. The evidence broadly established that the provisions of subsection 389(1) (a) of the Act had been satisfied. Consequently argument was largely confined to what particular Award or Agreement obligations existed and whether the employer had complied with those obligations.

[24] It was asserted on behalf of the employer, that the relevant industrial instrument was the 2006 Agreement and this instrument did not include any obligation on the employer to consult in circumstances of redundancy of daily hired employees like the applicants. Conversely, the CFMEU on behalf of the applicants referred to a variety of potentially applicable industrial instruments which contained unambiguous consultation provisions which would have established obligations upon the employer to consult with the applicants in respect of their redundancy.

[25] An examination of the various potentially relevant industrial instruments leads to the conclusion that the 2006 Agreement applied to the employment of the applicants at the time of their dismissals. The 2006 Agreement was, at the time of the dismissals of the applicants, a collective agreement-based transitional instrument having application via Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. It appeared that for some period of time there may have been some misunderstanding and confusion about the potential application of the 2010 Agreement. During the preparation for the Hearing it appeared that the applicants’ representatives were alerted to any mistaken reliance upon the 2010 Agreement as it did not apply to the employment of the applicants.

[26] The provisions of clause 3.4 of the 2006 Agreement make clear distinction in respect to consultation for redundancy for major construction employees as opposed to minor construction employees. When these provisions are read in conjunction with the definitions for major construction and minor construction and contract of employment provisions contained at clause 3.1.2, it is clear that the terminology of major construction employees comprehends that of daily hire engagement. Whether by design or accident, the provisions of clause 3.4 of the 2006 Agreement plainly exclude any obligation for consultation before termination of major construction employees on account of redundancy.

[27] There are no other terms contained in the 2006 Agreement which impose an obligation on the employer to consult in respect to redundancy of major construction employees and any attempted reliance upon the provisions of clause 2.3, Tool Box Meetings cannot be entertained.

[28] Consequently in this instance the relevant industrial instrument, the 2006 Agreement, does not contain any term which creates an obligation on the employer to consult with major construction employees (daily hire) about their redundancy. Therefore that part of the meaning of genuine redundancy as contained in subsection 389(1) (b) of the Act has been satisfied.

[29] Somewhat surprisingly neither side made submissions about the operation of subsection 389 (2) of the Act. Specifically there was little evidence provided about any prospect for either of the applicants to be redeployed within the employer's enterprise or within an associated entity of the employer. The employer is one of a number of associated entities within a group of companies and the potential for redeployment might logically arise.

[30] In circumstances where the applicable industrial instrument does not impose any obligation for consultation regarding redundancy the potential for consideration of redeployment might simply not arise for consideration. However, in order to satisfy the meaning of genuine redundancy as prescribed by s.389 of the Act it is necessary for FWA to be satisfied that redeployment would not have been reasonable in all the circumstances of the case. It would seem that even if there was no obligation on an employer to consult about redundancy, as was the circumstance in this instance, or in circumstances where an employer had discharged any consultation obligations, subsection 389(2) establishes a further requirement to in effect, extinguish any reasonable prospect for redeployment.

[31] The dearth of material coming from either side on the issue of redeployment of either of the applicants operated as a reflection upon any assessment of the realistic and reasonable prospect of any redeployment. Simply, neither the employer nor the applicants gave any consideration to redeployment and this was a clear reflection of an absence of any reasonable, realistic prospect of redeployment.

[32] It may have been argued that the issue of redeployment was not given consideration because there was no consultation entered into by the employer. However, even if redeployment was not contemplated because of the absence of consultation, the question would remain as to whether, if redeployment had been considered, it would have been reasonable in all of the circumstances. In circumstances where the applicants made secret audio recordings of the interview with their manager it would be unlikely that redeployment might present as an attractive proposition for the employer. In such circumstances I am satisfied that redeployment of the applicants would not have been reasonable.

Conclusion

[33] The applicants were dismissed because the employer was experiencing significant reductions in overall operational requirements. The applicants were employed as major construction (daily hire) employees under an industrial instrument which did not contain any obligation for the employer to consult about the redundancy of the applicants. In all the circumstances it would not have been reasonable for the applicants to be redeployed.

[34] Therefore the provisions of section 389 of the Act have been satisfied and the dismissals of the applicants were cases of genuine redundancy.

[35] Subsection 385(d) of the Act specifically excludes cases of genuine redundancy from any finding of unfair dismissal. Therefore the applications are without legislative jurisdiction. Consequently the applications must be dismissed and the proceedings are concluded accordingly.

COMMISSIONER

Appearances:

Mr T O’Brien, from the CFMEU, on behalf of the applicants.

Mr C Ban, on behalf of the employer.

Hearing details:

2012.
Brisbane:
February 17.
March 23.

 1   TG v SF Pty Ltd [2010] FWA 2650.

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