Mr Peter Mihajlovic v Lifeline Macarthur

[2014] FWC 5932

[2014] FWC 5932

FAIR WORK COMMISSION

DECISION

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

Mr Peter Mihajlovic
v
Lifeline Macarthur
(U2013/2607)

SENIOR DEPUTY PRESIDENT DRAKE SYDNEY, 27 AUGUST 2014

Application for relief from unfair dismissal.

[1] Mr Mihajlovic filed an application for an unfair dismissal remedy on 5 August 2013 pursuant to section 394 of the Fair Work Act 2009 (the Act). Lifeline Macarthur (Lifeline) objected to the application on various jurisdictional grounds.

[2] Vice President Hatcher and a Full Bench of the Fair Work Commission (Commission) have since dealt with all but one of those issues. 1 It remains for me to determine whether Mr Mihajlovic's termination of employment arose from a genuine redundancy in accordance with s.389 of the Act.

[3] Mr Mihajlovic represented himself in these proceedings. Lifeline was represented by Ms Perigo of Counsel. The application was complex and, having considered the requirements of the Act, I determined that it was appropriate that Lifeline have legal representation.

[4] Lifeline is a social community outreach program of the Uniting Church within New South Wales and the Australian Capital Territory. It is a not-for-profit organisation. On 1 December 2008, Mr Mihajlovic was appointed to the role of Group General Manager and assumed the title of Chief Executive Officer (CEO) in 2009.

[5] In November 2012 a five-person working party, appointed by the Parramatta-Nepean Presbytery, commenced a review of the mission and governance of Lifeline. On 8 February 2013 the working party provided its report containing recommendations regarding a potential restructure of the organisation and a re-orientation of its key focus areas.

[6] Mr Roams, who was a member of the Board of Lifeline at the time of the dismissal, gave evidence that it was his opinion, and that of others on the Board, that the organisation had to refocus on its telephone counselling and crisis support services 2.

[7] On 5 June 2013 Mr Mihajlovic was given notice of his dismissal which took effect on 5 September 2013.

[8] Lifeline submitted that it had no complaints concerning Mr Mihajlovic’s conduct or performance 3. It submitted that that Mr Mihajlovic’s termination of employment was a genuine redundancy.

[9] A genuine redundancy is defined in s.389 of the Act:

“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”.

[10] In Kekeris v A. Hartrodt Australia Pty Ltd 4 Senior Deputy President Hamburger considered whether or not a dismissal arising from the restructure of a supervisory team was a case of genuine redundancy. In that application, as a result of a restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:

“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the [Act’s] explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions.” (at [27]).

[11] As Justice Ryan observed in Jones v Department of Energy and Minerals 5 a “job” for the purposes of s.389 involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p.308). His Honour considered a circumstance where an employer might rearrange an organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, he said:

“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308).

[12] In Dibb v Commissioner of Taxation 6 , the Full Court of the Federal Court of Australia said (at [43]):

“...We consider that it is more accurate to say that an employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by any employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant.”

[13] The question implicit in s.389(1)(a) of the Act is one of fact.

[14] In this application Mr Mihajlovic submitted that two individuals had been hired to perform significant aspects of his role. Lifeline did not dispute this assertion. It confirmed that two external consultants have since been engaged to provide assistance on a temporary basis.

[15] After considering the evidence of the witnesses and the material provided by them, I am satisfied and find that the restructure of Lifeline’s operations resulted in a number of interim measures being implemented pending the appointment of an Operating Manager. I am satisfied and find that one specialist part-time bookkeeper role was created for a person at a lower level that Mr Mihajlovic to perform tasks which the applicant was previously performing 7.

[16] Having considered the requirements of s.389(1)(a) I am satisfied that the job Mr Mihajlovic previously performed was not required by Lifeline to be performed by anyone.

[17] In relation to the requirements of s.389(1)(b) a Full Bench of this Commission has found that an employer must fully comply with the consultation obligations in any applicable enterprise agreement and/or a modern award to meet the requirement for a genuine redundancy 8. Lifeline submitted that Mr Mihajlovic, a senior manager, did not come within the coverage of any relevant modern award.

[18] Section 143(7) of the Act states:

(7)  A modern award must not be expressed to cover classes of employees:

(a)  who, because of the nature or seniority of their role, have traditionally not been covered by awards (whether made under laws of the Commonwealth or the States); or
(b)  who perform work that is not of a similar nature to work that has traditionally been regulated by such awards.

[19] I am persuaded by Lifeline's evidence that, because of his seniority, Mr Mihajlovic was aware of the working party’s recommendations and the likelihood of a restructure of the organisation’s operations. I am satisfied and find, having considered the evidence elicited by Ms Perigo in cross-examination of Mr Mihajlovic, that he was aware it was possible that a restructure might result in his redundancy 9. Despite this, I am satisfied that Mr Mihajlovic did not have any apprehension of the immediate danger to his own position.

[20] I have considered the range of duties Mr Mihajlovic identified as those he performed and, having done so, I am satisfied and find that Mr Mihajlovic’s position was not one covered by the Social, Community, Home Care and Disability Services Industry Award 2010. Having regard to the requirements of s.389(1)(b) I am satisfied and find that Lifeline was not therefore required to comply with any consultation obligations within this award.

[21] A Full Bench of this Commission in Ulan Coals v Honeysett (Ulan) 10 discusses the factors necessary for consideration when determining whether it is reasonable in all the circumstances to redeploy an individual at the time of dismissal. These are:

(a) the managerial integration between associated entities;

(b) the nature of any available position;

(c) the qualifications necessary to perform the available position;

(d) the employee’s skills, qualifications and experience;

(e) the location of the job in relation to the employee’s residence;

(f) the remuneration which is offered.

[22] The Full Bench in Ulan found that “it is an essential part of the concept of redeployment…that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment” 11. Despite this, the Full Bench was satisfied that there may be circumstances where an employer may consider all these factors relating to redeployment and yet still determine that it would not be reasonable in the circumstances for an individual to be redeployed, taking into account its operational requirements.

[23] Mr Mihajlovic gave evidence and submitted that there was not a “thorough” check of the availability of roles that might have been suitable for him, or for roles at a lower pay-grade and of lesser status, nor was a consultation process conducted for the purposes of redeployment. Lifeline submitted that its Board engaged an Employment & Industrial Relations Ofc to assist in identifying possible roles for the type of skill and qualifications of Mr Mihajlovic, even at a lower level of remuneration. The evidence of Lifeline was that no role was determined to be “suitable alternative employment”.

[24] I accept Lifeline’s evidence that it took steps to locate suitable alternative employment for Mr Mihajlovic and I am satisfied and find that it did not find any that it would have been reasonable to redeploy him to within the entity and whilst meeting its operational requirements at the date of dismissal. In regard to the requirements of s.389(2) of the Act rundown I am satisfied and find that Lifeline considered redeployment but did not find it appropriate in the circumstances. I am satisfied that that was an appropriate and reasonable conclusion in the circumstances.

[25] There was evidence before me concerning the operational imperatives for the Lifeline restructure. I am satisfied that Lifeline's decision to divide Mr Mihajlovic’s duties and allocate them differently within its new structure was a decision open to it in the exercise of its discretion.

[26] I am satisfied and find that the termination of Mr Mihajlovic’s employment by Lifeline was a genuine redundancy within the meaning of the Act.

[27] The application is dismissed.

SENIOR DEPUTY PRESIDENT

Hearing details:

2014.

Sydney,

30 June,

11 July.

Appearances:

Mr Mihajlovic on his own behalf

Ms Perigo of Frederick Jordan Chambers

 1   VP Hatcher on 16 December 2013, [2013 ] FWC 9804; Full Bench 5 March 2014 [2014] FWCFB 1070; and VP Hatcher 24 March 2014 [2014] FWC 1871.

 2   PN833-836

 3   PN846

 4   [2010] FWA 674

 5 (1995) 60 IR 304

 6 [2004] (136 FCR 388)

 7   PN956

 8   Campbell Australasia Pty Ltd v Mr Greg McNay and Mr Patrick Humphreys[2010] FWAFB 6048

 9   PN1234-PN1237.

 10   [2010] FWAFB 7578.

 11 Ibid at [34].

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