Mr Robert Gallo v Laf Fire Technology and Management Pty Ltd
[2019] FWC 3895
•1 JULY 2019
| [2019] FWC 3895 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Robert Gallo
v
LAF Fire Technology and Management Pty Ltd
(U2019/1503)
DEPUTY PRESIDENT BULL | SYDNEY, 1 JULY 2019 |
Application for an unfair dismissal remedy. Jurisdictional objection – genuine redundancy – jurisdictional objection upheld – application dismissed.
[1] In this matter the applicant, Mr Robert Gallo, claims he has been unfairly dismissed from his employment with L&A Fazzini (LAF) Group of Companies. Mr Gallo’s employment contract attached to his application states his employer as LAF Fire Technology and Management Pty Ltd. The Form F3 filed by the employer states that the employer is as reflected in the employment contract. Pursuant to s.586 of the Fair Work Act 2009 (the Act) the application is amended to the extent that the true legal employer of the Applicant is correctly identified.
[2] The employer claims that there can be no unfair dismissal as claimed by Mr Gallo as his employment ended by way of a genuine redundancy, which pursuant to the various provisions of the Fair Work Act 2009 (the Act) provides a complete defence to a claim of unfair dismissal.
[3] The matter proceeded on the basis that the jurisdictional objection would be dealt with in the first instance and only if unsuccessful would the merits of the unfair dismissal claim be dealt with.
[4] The respondent sought to be legally represented on the basis that the jurisdictional objection had a degree of complexity and that it would be unable to represent itself effectively at the hearing. This was opposed by the applicant.
[5] In granting leave for the respondent to be legally represented it was noted that the applicant had stated that he was legally represented in his Form F2 application by J Biady & Associates Lawyers. On 9 April 2019 a legal representative from J Biady and Associates Lawyers appeared on behalf of the applicant at a telephone directions conference. On 2 May 2019 and 16 May 2019 emails were forwarded to the Commission from J Biady and Associates Pty Ltd Lawyers on behalf of the applicant.
[6] On 17 May 2019 JFM Law advised the Commission that it anticipated it would be retained by the applicant. A Form F53 was filed on 20 May 2019 and JFM Law appeared on behalf of the applicant at a further telephone directions conference. On 27 May 2019 a Form F54 was filed advising that they had ceased to act for the applicant.
[7] Having regarded the written submissions filed by both parties and the background prior to the hearing the Commission considered that the matter before it was sufficiently complex that legal representation on behalf of the respondent would enable the jurisdictional objection to be dealt with more efficiently.
Submissions of the Respondent
[8] The respondent initially raised a number of jurisdictional objections including that it was a small business employer which were subsequently withdrawn other than that the dismissal of the applicant was a genuine redundancy.
[9] The respondent submitted that on 3 November 2017 it issued to Mr Gallo a Letter of Offer backdated to 6 September 2017 to reflect when he had commenced providing services to the respondent. Included in the correspondence was a Deed of Confidentiality; neither the Letter of Offer nor Deed of Confidentiality were signed by the applicant. The applicant did however return the New Employee Personal and Banking Form also attached to the correspondence, which included the acknowledgement that he had received, read, understood and accepted in full, the terms and conditions of his contract of employment dated 6 September 2017.
[10] The position offered was as General Manager Business Development and Sales and was part-time, 3 days per week.
[11] It was submitted that the applicant’s redundancy arose due to a change in operational requirements and the needs of the business. After several reviews commencing from November 2018 and concluding in January 2019 the respondent determined that the applicant’s position of General Manager – Business Development & Sales was no longer required to be performed by anyone, was surplus to requirements, and the position would be made redundant.
[12] On 25 January 2019 the applicant was advised that his position was being made redundant and that his employment would be terminated the following day being 26 January 2019.
[13] The respondent states that it sought to provide Mr Gallo with alternate work by offering him a consultant position titled Technical and Sales Consultant for a period of 3 months which he did not accept. It was put that numerous attempts to engage the applicant in discussions regarding alternate employment were rebuffed by Mr Gallo. The respondent contends the alternate job offer is not the same as that previously occupied by the applicant which is no longer being performed by anyone. The new role was to carry out technical duties relating to an upcoming ‘fire test’, hence the contracted period of 3 months and limited duties.
[14] On 7 February 2019 the applicant telephoned Mr Colls the General Manager advising that he was not interested in the alternate position offered, which was confirmed in a response email from Mr Colls to Mr Gallo on the same day. 1
[15] The respondent submits that the applicant is not covered by any modern award, including the Commercial Sales Award 2010 (the Award), and is thus not subject to any award notification or consultation requirements with respect to making the applicant’s position redundant. Although it was conceded that should the Award have application to Mr Gallo the respondent did not strictly comply with the consultation requirements concerning redundancy.
[16] It was also put that it would not have been reasonable in all the circumstances for the applicant to have been redeployed within the respondent’s enterprise or the enterprise of an associated entity other than in the position offered to the applicant which he declined.
Evidence of Mr Frank Colls
[17] Mr Colls is the respondent’s General Manager and provided a witness statement and was subject to cross examination. Mr Colls stated that prior to the applicant’s employment the position of General Manager Business Development & Sales did not exist. The position was created specifically for Mr Gallo who had asked for a job because at the time he had been unemployed for 9 months and could not find employment.
[18] In creating the new part-time position it was anticipated that Mr Colls would share certain responsibilities with Mr Gallo focusing on sales and marketing, with Mr Colls focussing on national sales, production and finance operations. The shared responsibilities were generic duties which fell under the General Manager position.
[19] The job share position was also created to minimise the financial impact of another full-time position as Mr Colls was planning to take substantial periods of leave and a General Manager was required to be in the office 5 days a week.
[20] Mr Colls confirmed that due to the operational requirements of the business Mr Gallo’s position of General Manager Business Development & Sales was no longer required; however, this was not a reflection of Mr Gallo’s performance. Mr Colls submitted that the respondent had been undertaking a review of its organisational structure from 20 November 2018 following the Contracting Manager’s resignation. All positions of the respondent were reviewed. On or around 22 November 2018 he discussed with Mr Lorenzo Fazzini, the respondent’s Managing Director, the impact of the Contracting Manager’s resignation. It was agreed that this position not be replaced and to redistribute the duties to other staff.
[21] Further discussions took place in respect to the applicant’s position and the needs of the business. In view of the Contracting Manager’s departure consideration was given as to whether Mr Gallo’s newly created position was still required. On 20 December 2018, the last day before the Christmas break, Mr Fazzini and Mr Colls met and agreed that Mr Gallo’s position had been specifically tailored to accommodate Mr Gallo’s preferences and there would be minimal impact if the position was made redundant given that Mr Colls was maintaining the majority of General Manager duties and the remaining duties that Mr Gallo performed were no longer needed by the business.
[22] While a final decision was not made, it was the preliminary view that the role was no longer needed. On or around 22 January 2019 Mr Colls again discussed Mr Gallo’s position with Mr Fazzini and it was determined that the position of General Manager Business Development & Sales would be made redundant and that this would be confirmed in writing to Mr Gallo.
[23] Following attempts to find alternative employment for Mr Gallo it was determined that there was a need for a Technical & Sales Consultant position to carry out technical duties primarily relating to technical writing for an upcoming fire test. This role would be limited in duration to 3 months without any management responsibilities.
[24] On 23 January 2019 Mr Colls telephoned Mr Gallo and advised him that his position would be made redundant. During the same telephone conversation Mr Colls advised Mr Gallo that the respondent would offer him an alternate contract position for 3 months and they were happy to discuss and negotiate the terms of the position.
[25] Mr Colls stated that Mr Gallo was offered a position of Technical & Sales Consultant, a 3 month position in his termination letter of 26 January 2019, 2 which Mr Colls issued. On 5 February 2019 Mr Colls received an email from Mr Gallo in respect of the new position which stated inter alia “… you will need to revisit your numbers and come up with better numbers for me to consider it seriously”. Mr Gallo did not accept the new position and his dismissal due to redundancy was effected.
[26] Mr Colls’s evidence was that the alternate position of Technical and Sales Consultant offered to Mr Gallo no longer exists as the 3-month period has elapsed. 3
[27] In cross examination Mr Colls refuted that Mr Gallo was terminated because he had previously refused to sign a confidentiality agreement but that the redundancy occurred because of the operational needs of the business. The new role was created to match Mr Gallo’s skills and the position was not comparable to his previous role of General Manager Business Development & Sales which was no longer required.
Submissions of Mr Robert Gallo
[28] Mr Gallo represented himself and called no witnesses. Mr Gallo provided a witness statement and gave oral evidence which he did in a straightforward manner without prevarication and was subject to cross examination. Mr Gallo submits that he was unfairly dismissed on the basis that his part-time position of General Manager Business Development & Sales with the respondent was not redundant as he was offered a new role with a different title but the same duties. He claimed the new title of Technical Sales Consultant implied that he had been demoted. The new job title was a transparent effort to imply a change of responsibilities. 4 The position which he did not accept, was only for 3 months and did not have any commissions attached to the remuneration which he found objectionable.5
[29] Mr Gallo stated that the new position he was offered was only made on the basis that he sign a confidentiality deed as was required in his previous role which he had not signed. He had raised various concerns and requested changes to the confidentiality deed for his previous position, none of which were agreed to by the respondent.
[30] Mr Gallo stated that he had previously worked for the Managing Director Mr Fazzini at various times in a senior manager role reporting directly to Mr Fazzini. At all times his employment has involved providing engineering solutions for building and civil construction projects and sales of a highly technical nature.
[31] Mr Gallo submitted that in the months leading up to his termination Mr Fazzini’s attitude towards him changed and he was less involved in meetings and discussions.
[32] On 26 January 2019 Mr Gallo received an email from Mr Colls that his role of General Manager Business Development & Sales had been made redundant of which he submits he had no prior indication. 6
[33] On 5 February 2019 he emailed Mr Fazzini expressing his concern at the events that had unfolded and asking him to expedite the payment of outstanding commissions.
[34] Mr Gallo accepted that his previous position had not been filled by anyone else 7 but maintained that his previous position was still required.8 It was Mr Gallo’s view that his redundancy was as a result of refusing to sign his employment letter and confidentiality deed attached to his previous position9 and for the respondent to avoid having to pay substantial commissions the respondent would otherwise be required to pay.10
[35] Mr Gallo also submitted that he had been underpaid wages, commissions and superannuation.
[36] In respect to whether an industrial instrument covered Mr Gallo’s employment he submitted that the Commercial Sales Award 2010 was the closest award he could find that covered his duties; 11 he did not specify any particular award classification or elaborate on this submission.
Relevant Legislation
[37] In considering the respondent's jurisdictional objection it is first necessary to examine the relevant legislation concerning unfair dismissal in the case of an alleged redundancy.
[38] Section 394(1) the Act provides that a person who has been dismissed may apply to the Fair Work Commission (the Commission) for an order granting a remedy under Part 3-2 - Unfair Dismissal, Division 4 - Remedies for unfair dismissal.
[39] Section 385 of the Act provides a definition of what an unfair dismissal is:
What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(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
and relevantly in this case:
(d) the dismissal was not a case of genuine redundancy
(My emphasis)
[40] Section 396 of the Act requires the Commission to decide a number of threshold matters before considering the merits of an application for unfair dismissal. The relevant matter in this case is found at s.396 of the Act which states:
“Section 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:
...
(d) whether the dismissal was a case of genuine redundancy.”
[41] Section 389 of the Act sets out the meaning of “genuine redundancy” which is wider than simply whether the employee's job is no longer required. Section 389(1) states:
“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.”
(My emphasis)
[42] The reference at s.389(1)(b) of the Act is to whether the employer has complied with any obligation to “consult” about the redundancy as opposed to any other obligation under a modern award in relation to redundancy i.e. Job Search Entitlement, which is contained for example at clause 12.3 of the Commercial Sales Award 2010.
[43] Section 389(2) of the Act goes on to say:
“(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.”
[44] The Explanatory Memorandum to the Fair Work Bill 2008 states the following in respect of s.389 of the Act:12
“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 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, 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 employees;
• 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 a 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 dismissal is not a case of genuine redundancy if it would have been reasonable in all 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.”
[45] The combined effect of these provisions is that if a dismissal is a result of a genuine redundancy which is what is put by the respondent, then the Commission need not determine and does not have jurisdiction to determine whether the dismissal was harsh, unjust or unreasonable (see UES (Int’L) Pty Ltd v Harvey).13
Was the position no longer required?
[46] To uphold Mr Gallo’s submission which was that his dismissal on the ground of redundancy was in reality a sham I would have to reject the evidence of Mr Colls summarised above. Mr Colls’ explanation of the review of positions he undertook in November 2018 within the business in conjunction with Mr Fazzini, following the resignation of the Contracting Manager’s whose position was not replaced, was credible and not put in doubt under cross examination.
[47] The conclusion being that Mr Colls was performing the majority of the General Manager duties with the remaining duties performed by Mr Gallo no longer being required by the business. I accept the evidence of Mr Colls that Mr Gallo’s position did not exist prior to his appointment in September 2017 and was specifically created to provide Mr Gallo with employment; this appears to have been mutually beneficial to the parties at the time.
[48] At the same time there can be no doubt that Mr Gallo and the respondent were in dispute concerning the signing of a confidentiality deed attached to his position as the General Manager Business Development & Sales which had been ongoing for some time. The assertions of Mr Gallo that this dispute together with the respondent not wishing to continue to pay commissions to Mr Gallo as being the real reasons for his redundancy were unable to be demonstrated to be other than assertions. In cross examination Mr Colls rejected what was put to him by Mr Gallo, with Mr Colls’ evidence being that the position had not been replaced since Mr Gallo’s departure in January 2019. Following this Mr Colls undertook all general management tasks with the balance of Mr Gallo’s duties no longer being performed by anyone.
[49] Based on Mr Coll’s evidence I am unable to draw the inferences urged upon the Commission by Mr Gallo. After examining possible redeployment options a short-term position of a technical nature was offered to Mr Gallo to deal with an upcoming fire test which was deemed suitable by the respondent for Mr Gallo’s skills, which he declined.
[50] The new position of Technical and Sales Consultant did not contain the management responsibilities contained in the previous position and was a substantially different role from that of General Manager Business Development & Sales. The new position was technically based for a defined project which has now been completed. I am unable to accept as put by Mr Gallo on the evidence of Mr Colls that the position of Technical and Sales Consultant was the same as his previous role as the General Manager Business Development & Sales.
[51] Mr Gallo’s redundancy was not a reflection of his competency in performing his tasks but as the result of a commercial decision taken by the respondent. As such, I am satisfied that his position was no longer required to be performed by anyone due to changes in the operational requirements of the respondent.
[52] It is not the function of the Commission when determining whether a dismissal is a case of genuine redundancy as defined by the Act to form a view about the merits of the decision to make a position redundant as long as the respondent acted as it did because of changes in its operational requirements. 14
Consultation obligations
[53] I am also satisfied that no modern award or enterprise agreement had application to Mr Gallo requiring adherence to any consultation obligations. The Commercial Sales Award 2010 applies to commercial travellers, merchandisers and advertising sales representatives. Having regard to the Award definitions of these classifications and the duties undertaken by Mr Gallo as stated in his witness statement, 15 as General Manager Business Development & Sales, it is clear the role is not Award covered.
[54] Despite the above finding, even if the Award has application it is arguable whether clause 8 Consultation, where an employer makes a definite decision to make major changes, is invoked where a single position is made redundant. This view arises from the Full Bench decision of Nick Tsiftelidis v Crown Melbourne Limited16 where it was held that the meaning of ‘major workplace change’ in a consultation clause in an enterprise agreement did not capture individual redundancies on the basis that individual redundancies do not constitute a “major change” to the employer’s operations that impact upon a collective of employees. In that decision, the Full Bench stated:
“[27]This extract shows that clause 24 of the Agreement, and the additional consultation requirements prescribed therein, are enlivened only when the Respondent “makes a definite decision to introduce major changes in production, program, organisation, structure or technology in relation to its enterprise.” It follows that to determine whether consultation is required under clause 24, we must first determine whether the Appellant’s redundancy was a “major change” within the meaning of the disputed clause (thereby enlivening the clause).
[55] As stated above the Full Bench went on to hold that the consultation clause in that agreement did not capture individual redundancies on the basis that individual redundancies do not constitute a “major change” to the employer’s operations.
Redeployment
[56] It was not demonstrated that it would have been reasonable in all the circumstances for Mr Gallo to be redeployed in the respondent’s enterprise or the enterprise of an associated entity.
Conclusion
[57] In all respects the requirements of s.389 of the Act were met by the respondent and, as such, a complete defence to the claim of unfair dismissal has been made out.
[58] Based on this conclusion, I am not required or able to consider the substantive application under s.387 of the Act, as the termination is a genuine redundancy pursuant to s.389 of the Act and thus the termination is excluded from the Act’s definition of an unfair dismissal.
[59] The application for an unfair dismissal remedy is dismissed for want of jurisdiction.
DEPUTY PRESIDENT
Appearances:
Mr R Gallo on his own behalf
Ms B Byrnes of Counsel and Ms M Xu Solicitor on behalf of the respondent
Hearing details:
2019
June 5
Printed by authority of the Commonwealth Government Printer
<PR709044>
1 Attachment (G) to Form F3
2 The correspondence is dated 25 January 2019
3 Witness Statement Exhibit R2 at [26]
4 Written submissions 4 June at [9] Exhibit A3
5 Ibid at [12]
6 Form F2 at {23]
7 Witness Statement A1 at [33] and under cross examination
8 Written submissions 4 June at [5] Exhibit A3
9 Ibid
10 Ibid
11 Ibid at [11]
12 See Acts Interpretation Act 1901 in using Explanatory Memorandum to confirm the meaning of words in an Act.
13 [2012] FWAFB 5241
14 See decision of VP Hatcher in Tebikenibeu Low v Menzies Property Services Pty Ltd [2014] FWC 7829 at [16]
15 Exhibit A1 at [6]
16 [2016] FWCFB 4675
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