Mrs Chimfwembe Bwalya v PM Financial Services Pty Ltd T/A McKinley Plowman & Associates

[2016] FWC 5547

[2016] FWC 5547

FAIR WORK COMMISSION

DECISION

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

Mrs Chimfwembe Bwalya
v
PM Financial Services Pty Ltd T/A McKinley Plowman & Associates
(U2016/5009)

COMMISSIONER CLOGHAN PERTH, 12 AUGUST 2016

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

[1] Mrs Chimfwembe Bwalya (Mrs Bwalya or Applicant) has made application to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from her employer, PM Financial Services Pty Ltd T/A McKinley Plowman & Associates (MP & Associates 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:

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

[4] The application was the subject of a conciliation conference before a Conciliator and also before the Commission as constituted. The application remains unresolved.

[5] At the hearing, the Applicant sought permission of the Commission to be represented by a paid agent pursuant to s.596 of the FW Act. Having considered the nature of the proceedings and the material provided to the Commission as part of procedural directions, I was satisfied that permission should be granted to the Applicant to be represented because it would enable the matter to be dealt with more efficiently in view of its complexity. Further, that it would be unfair not to allow the Applicant to be represented because she would be unable to represent herself effectively.

[6] At the hearing, the Applicant was represented by Mr D Chibale, Agent and Mrs Bwalya gave evidence on her own behalf.

[7] The Employer was represented by Mr S Farrell, Senior Employee Relations Consultant, Chamber of Commerce and Industry of Western Australia. Ms Donna Jackson, Human Resource and Office Manager gave evidence on behalf of MP & Associates.

[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.

RELEVANT BACKGROUND

[12] Mrs Bwalya commenced employment with MP & Associates on 7 May 2014 as a Finance Assistant.

[13] MP & Associates is a business of certified practising accountants, financial planners and finance brokers. At the time of the Applicant’s cessation of employment, the business employed approximately 45 employees.

[14] On entering into her contract of employment, Mrs Bwalya’s responsibilities and duties included, but not limited to, “general accounting duties as directed”.

[15] In 2015, MP & Associates introduced an electronic workflow process which resulted in administration efficiencies. 1

[16] In late 2015, two senior employees of the Employer resigned. These resignations and the efficiencies gained by the electronic workflow process, resulted in the Employer reviewing its organisational structure.

[17] The Employer’s review produced a proposal that one of the vacated positions (Business Manager) having its role and responsibilities redeveloped into two roles. A Senior Office and Human Resources position. Secondly, the creation of a Finance Manager’s position which would be responsible for managing the in-house financial management of the business.

[18] The Employer’s review had the consequence of the Finance Assistant and Human Resource/Finance positions being considered for abolition. 2

[19] Ms Jackson was appointed as the Human Resource and Office Manager position.

[20] As part of her role, Ms Jackson was required to review the Applicant’s position description and skillset, and make a comparison against the proposed Finance Manager’s duties and criteria for appointment to that position.

[21] On 5 February 2016, the Applicant was advised of the restructuring of the Administration and Finance Departments. The Applicant was advised that “some position(s) will be made redundant. The Finance Assistant is under consideration”. 3

[22] The Applicant was advised that the proposed redundancies would take place between 10 and 12 February 2016. Affected employees would be given the opportunity to provide feedback or suggested alternative solutions. Feedback was sought by 10 February 2016. The Employer indicted that it would consider alternative employment where possible.

[23] On 5 February 2016, the Applicant sought and was provided with further information on the restructure.

[24] On 9 February 2016, the Applicant sought a meeting to discuss the possible abolition of her position.

[25] On 10 February 2016, Mrs Bwalya met with Mr Plowman, Director of MP & Associates and Ms Jackson.

[26] On 11 February 2016, Mrs Bwalya’s employment was terminated on the grounds of redundancy.

CONSIDERATION

[27] 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

[28] 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.”

[29] The Explanatory Memorandum provides examples of changes to the operational requirements of an enterprise which will lead to a genuine redundancy at paragraph 1548 of the Explanatory Memorandum. They are relevantly as follows:

“ 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.”

[30] 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 has been met. The Employer no longer required the position occupied by Mrs Bwalya to be performed by a discrete person because of changes in the operational requirements of the business.

[31] 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?

[32] The Employer asserted that the Applicant’s employment was not the subject of an enterprise agreement or modern award.

[33] The Applicant did not state which modern award applied to her employment. However, it was submitted that Mrs Bwalya’s “Letter of Employment” stated that her employment, in part, will be “those set out in the National Employment Standards set out in the Fair Work Act 2009”, and further, “whether or not the Applicant was covered by a Modern Award is immaterial to support the respondent’s jurisdictional objection”. 4

[34] While I am unable to agree with the Applicant’s submission, this statutory “test” does not go to the “heart” of Mrs Bwalya’s case that her termination of employment was not genuine redundancy.

[35] Notwithstanding the Employer’s submission that a Modern Award did not apply to Mrs Bwalya’s employment, and consequentially there was no obligation to consult with the Applicant concerning the redundancy, the Employer asserts that it consulted with Mrs Bwalya.

[36] Having considered the submission of both parties, I am unable to find that a Modern Award applied to the Applicant’s employment. In the event I am wrong with respect to this finding, I am satisfied, on the evidence, that the Employer consulted with the Applicant about the redundancy.

[37] I now turn to the remaining test.

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

[38] For the above reasons, I am satisfied that Mrs Bwalya’s termination of employment was a genuine redundancy pursuant to s.389(1) of the FW Act.

[39] However, even if the Commission, on the evidence, finds that a termination of employment is a case of genuine redundancy, that finding is “negated”, if it was “reasonable in all the circumstances, for the person to be redeployed”.

[40] Section 392(2) of the FW Act could be described as the “exception rule”. Put shortly, it does not follow that a “genuine redundancy” is a “genuine redundancy” if the person can be redeployed into another position. For it to be a genuine redundancy, the Commission is required to find that it would be unreasonable, in all the circumstances, to redeploy the person affected by the abolition of his or her position, into another position.

[41] Obviously for a person to be redeployed, or not be redeployed, it is necessary in the first instance, to determine whether another position exists. I say “position” because that is consistent with the language used in the Explanatory Memorandum at paragraph 1552.

“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.” (my emphasis)

[42] While the example in the Explanatory Memorandum refers to a “small business”, for the example in paragraph 1552 to make logical sense, a position must be available (exist and be vacant) for which the employee can be redeployed into (if reasonable in all the circumstances).

[43] In an email dated 28 January 2016, Mr Plowman requested Ms Jackson to:

“review the existing Finance Assistance job description versus that of a potential Finance Manager. When you are ready, let’s meet with the management team to decide if the Finance Assistant role should be made redundant and a Finance Manager needs to be appointed. If this is the decision, we’ll need to move quickly, so we can let Chichi [Mrs Bwalya] know and give her the opportunity to make suggestions and apply for the new Finance Manager role”. 5

[44] On 1 February 2016, Ms Jackson forwarded her review to Mr Plowman with recommendations. Subject to agreement at “director level”, one of the recommendations was abolition of the Finance Assistant’s position and the establishment of a Finance Manager’s position.

[45] At some point after 1 February 2016, and before 5 February 2016, the Employer agreed to Ms Jackson’s recommendations with respect to abolition of the Finance Assistant’s position and creation of the Finance Manager’s position subject to consultation with the Applicant.

[46] Ms Jackson met with staff and advised them of the proposed organisational restructure and of the possibility of positions being made redundant.

[47] Mrs Bwalya was not at the staff meeting due to being on parental leave. Consequently, Ms Jackson advised the Applicant by email, on the same day of the staff meeting – 5 February 2016.

[48] On receipt of the email, the Applicant sought to discuss the matter.

[49] On 5 February 2016, Mr Plowman, Ms Jackson and Mrs Bwalya discussed Ms Jackson’s email to the Applicant by telephone.

[50] In the course of the discussion, it is uncontested that Mr Plowman informed the Applicant that a review of her skills and abilities had been made vis-à-vis the requirements of the Finance Manager’s position. The review revealed that Mrs Bwalya was not suitable for the position. 6

[51] At the conclusion of the telephone discussion, the Applicant advised Mr Plowman that she “was shocked at the news and would get back to him in due course”.

[52] On 10 February 2016, the Applicant again met with Mr Plowman and Ms Jackson.

[53] With the consent of all parties, the meeting was audio recorded and submitted in evidence to the Commission. 7

[54] Ms Jackson’s evidence of the meeting demonstrates that Mr Plowman explored four (4) alternatives should Mrs Bwalya’s position of Finance Assistant be abolished. These alternatives were discussed with the Applicant. For various reasons, the “alternatives” were not suitable. 8

[55] At the meeting, Mr Plowman and Ms Jackson indicated to Mrs Bwalya that any person whose position is being made redundant must be considered for redeployment; that included the planned creation of the position of Finance Manager.

[56] Mrs Bwalya was informed that her performance did not go beyond that of a Finance Assistant and that she did not have the skill set for a Finance Manager.

[57] With respect to other redeployment options, Mrs Bwalya stated that: she did not have any suggestions; was not in a “mental position” to make any suggestions and, in any event, the Employer was in the best position to make any suggestions.

[58] Mrs Bwalya acknowledged that the Employer had considered her for the Finance Manger’s position but when advised that she did not have the required skill set, responded “that’s beside the point”. Unfortunately, that is the point when it concerns the reasonableness, or otherwise, of redeployment. 9

[59] Mrs Bwalya excluded herself from various positions due to the position not matching her qualifications and experience, or that she had previously been unsuccessful in an application to transfer to a vacant position in Business Services. However, Mrs Bwalya considered herself suitable for redeployment into the Finance Manager’s position should it be established.

[60] In summary, I find that at the meeting on 10 February 2016, the Employer discussed, and considered with the Applicant, various redeployment options if her position was abolished. None of those options, for various reasons, were suitable.

[61] Ms Jackson’s evidence concludes that, “it was understood in the meeting that the restructure would be going ahead as the reasons why it was being considered were still valid” 10 and “after the meeting with the Applicant, the Respondent’s management team met and decided to implement the restructure”11.

[62] While both statements in evidence are not entirely in harmony, I am of the view that Ms Jackson’s first statement is a reflection of her final words at the meeting on 10 February 2016. 12 The second statement is, in my view, the formal conclusion of the Employer’s management decision making process with respect to the organisational restructure. The conclusion included, for my purposes, the abolition of the Finance Assistant’s position and the establishment of the Finance Manager’s position.

[63] Shortly after the meeting, the Employer resolved to go ahead with the restructure which involved the abolition of the Applicant’s position and establishment of the Finance Manager’s position.

[64] It is at this point, the Applicant submits that a position was vacant and that “it would have been reasonable in the circumstances for [Mrs Bwalya] to be redeployed” into. 13

[65] There is no dispute that the Employer found Mrs Bwalya unsuitable for the position of Finance Manager and proceeded to advertise for candidates for the vacant position on 12 February 2016.

[66] I now turn to the issue of whether, in the circumstances, it would have been reasonable to redeploy Mrs Bwalya into the position.

[67] 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 reasons” and “not greatly less or more than might be expected”. The ACOD also defines “all” as “the whole amount”, “greatest possible” or “extent of”.

[68] In all the circumstances, was it suitable for Mrs Bwalya to be redeployed into the position of Finance Manager?

[69] Ordinarily, if an employee’s position is abolished and the employee objects to being redeployed into a vacant position, it would be reasonable to request the employee as to why he or she objects. The objections could range from salary, status of position, additional travel, experience, skills, qualifications or they simply do not wish to work in that area. These are practical considerations within the legal context of what is considered to be a genuine redundancy. While this consideration is a “blend” of fact and law, there is no definition of what is “reasonable” in the FW Act. Consequently, it is necessary to consider the facts and circumstances of each case. What may be reasonable in one set of circumstances may not be reasonable in another set of circumstances.

[70] The circumstances and relevant factors in this case of redeployment are as follows:

• the Finance Manager is a new position and has arisen due to the introduction of a new IT system and organisational restructure;



• the Finance Manager was established to “absorb gaps in the business at a senior level along with current finance assistant workload”. 14



• “the proposed Finance Manager role would not only take on the 25% senior level tasks but would have additional senior level tasks added to it [described in evidence]”; and



• the Applicant’s Letter of Engagement describes her duties as “general accounting duties as directed”. The Finance Manager’s position appears to be not only senior to the Finance Assistant, but required to undertake what is described as “senior level tasks”. 15

[71] From the evidence, it appears that the position has been designed to take advantage of IT improvements in the business, and the inability of Mr Plowman to give his full attention to various finance matters due to him taking on marketing responsibilities.

[72] It would appear that the Employer was creating the position of Finance Manager to fulfil a congruence between higher level roles and responsibilities, improvements in the IT system and the overall role of Mr Plowman. With no disrespect to the Finance Assistant, it appears that this position was carrying out routine accounting functions.

[73] Shortly put, for the Applicant to be redeployed into the Finance Manager’s position, it would have been a “promotion”.

[74] In proceedings, both parties referred to the advertisement on SEEK where the Employer has set out the skills and experience necessary to be the suitable candidate for the position.

[75] Having considered the dimension of the Finance Manager’s position, it is necessary to balance this with, and consider, the qualifications, skills, knowledge, experience and performance of Mrs Bwalya who is seeking redeployment into that position.

[76] There is no dispute that the Employer did not consider Mrs Bwalya suitable to be redeployed into the Finance Manager’s position.

[77] The Employer, in coming to the decision that Mrs Bwalya was unsuitable, considered the following factors which were provided in evidence to the Commission:

• Extension of probationary period: In or around September 2014, the Applicant’s probationary period was extended for two (2) months as her work needed “the required improvements in work standard”. Balanced against this situation is that the Applicant was ultimately confirmed as a permanent employee and that her work improved to the required standard, subject to my comments below. While the Applicant was concerned with the manner which led to the extension of her probationary period, she did not dispute the “feedback” regarding her performance.



• Performance review: Mrs Bwalya’s performance review dated 15 February 2015 identifies both her strengths and weaknesses. Under the heading of “Areas needing improvement”, the following is recorded:

- “Check work!! This is an ongoing concern that has been raised pre-probation sign-off and as a condition of probation sign off (see “draft” December 14 Board papers for recent example of sloppy checking of work).

- Reporting requests – timeliness “getting better” but quality of work needs to improve. “Communication skills need work”. 16

[78] Again, these concerns have to be balanced against the Applicant’s positive attributes.

[79] Prior to the telephone call with Mrs Bwalya on 5 February 2016, Ms Jackson prepared a redeployment analysis based upon 17 factors relating to “skills/attributes/experience/qualifications” – some of which align with the criteria in the SEEK advertisement for the Finance Manager’s position. Of the 17 factors, Mrs Bwalya met six (6) criteria, the Employer was unsure in relation to two (2) factors and the remainder attracted a negative rating. The assessment was based upon comments by Mr Plowman and two (2) other Directors of MP & Associates. 17

[80] Mr Chibale repeated and rephrased to Ms Jackson the question why the Employer did not consider Mrs Bwalya suitable for the position of Finance Manager. Ms Jackson’s evidence did not depart from the fact that the job of Finance Manager had been designed to meet the organisational requirements of the business. While Mrs Bwalya had some strengths, when those strengths and weaknesses were considered together, she did not meet the primary core needs of the position and the business’ requirements. Put shortly, having identified the tasks and skills required, there was a “mis-match” between the position and the Applicant – for this reason, the Applicant was deemed unsuitable for redeployment into the position of Finance Manager.

[81] Shortly put, in determining whether it was reasonable to redeploy Mrs Bwalya into the position of Finance Manager, the Commission has been provided with evidence of the Applicant’s inadequacies in her current position and the Employer’s expectations regarding the role and responsibilities in the newly created position of Finance Manager. Further, the Commission has been provided with a fairly detailed assessment by accountants, of an accountant, as to whether the Applicant could manage the finances of its accounting practice.

[82] Having considered the evidence and submissions, I find that the Employer’s decision not to redeploy Mrs Bwalya into the position of Finance Manager was reasonable within its ordinary meaning. Accordingly, I find the exception in s.389(2) of the FW Act not applicable.

CONCLUSION

[83] For the reasons set out above, I am satisfied that Mrs Bwalya’s dismissal was a case of genuine redundancy. Accordingly, the application must be dismissed and an Order to this effect is attached to this Decision.

COMMISSIONER

Appearances:

D Chibale on behalf of the Applicant.

S Farrell on behalf of the Respondent.

Hearing details:

2016:

Perth,

8 August.

<Price code C, PR583959>

 1   Exhibit R1 (4)

 2   Exhibit R1 (2)

 3   Exhibit R4 (3)

 4   Exhibit A1 (4)

 5   Exhibit R4 (attachment 2)

 6   Exhibit R4 (36)

 7   Exhibit R3

 8   Exhibit R4 (49)–(51)

 9   Exhibit R3

 10   Exhibit R4 (52)

 11   Exhibit R4 (55)

 12   Exhibit R3

 13   Exhibit A1

 14   Exhibit R4 (2)

 15   Exhibit R4 (2)

 16   Exhibit R5

 17   Exhibit R4 (4)

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