Mrs Linda Grove v Help Enterprises

[2014] FWC 3168

[2014] FWC 3168 [Note: An appeal pursuant to s.604 (C2014/4875) was lodged against this decision - refer to Full Bench decision dated 15 September 2014 [[2014] FWCFB 6288] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Mrs Linda Grove
v
Help Enterprises
(U2013/16788)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 21 MAY 2014

Summary - unfair dismissal application - whether redundancy - operational reasons - employer prerogative to change organisational structure to achieve business goals - employer the bearer of risks - no s.389 objection.

[1] This decision concerns an application by Ms Linda Grove under s.394 of the Fair Work Act 2009 (“the Act”) seeking an unfair dismissal remedy in relation to the termination of her employment by Help Enterprises (“the employer”). The employer is a not-for-profit organisation which delivers a range of employment programs to the community, including for persons with disabilities.

[2] Ms Grove began working for the employer on 3 April 2013 under an employment contract in the capacity of a full time salaried Senior Employment Consultant. Her employment ended on 11 December 2013 (as the employer claims) because Ms Grove’s position was no longer required owing to a restructure of the enterprise. The employer contends that Ms Grove otherwise was a competent and experienced consultant.

[3] The employer contends that the Employment and Training Division of the enterprise, in which Ms Grove was employed, was split and restructured to maximise opportunities for operations as autonomous business units established in the Brisbane North Area (which comprised Strathpine, Mitchelton, Toowong and Nundah). Evidence was given that the Employment and Training Division as a composite entity faced a number of issues concerning decreased revenue and high staff turnover and costs and needed to be repositioned to take up new opportunities.

[4] The employer ultimately did not press a claim under s.389 of the Act, hence the application was heard on its own terms.

[5] In the course of the restructure, the employer explained that a new General Manager was appointed, the Brisbane North Area Manager was promoted to Assistant Manager Employment, and another manager was promoted to Business and Performance Analyst. A new Area Manager was also engaged. Ms Grove was employed at the Nundah site, or business unit.

[6] The employer considered that the Nundah site could not support the presence of a Senior Employment Consultant along with other various managers including the Manager of the Mental Health Integrated Employment Program, who was also present at the site. That is, because Ms Grove’s duties and responsibilities as a senior consultant involved numerous management related and higher level activities, the on-site managers were able to conduct those duties. The Employment Division was also said to have been over-budget (as a result of the restructure and relocation) and cost savings were sought.

[7] Prior to the restructure Ms Grove’s position required her to report to the North Brisbane Area Manager.

[8] The letter of termination that was given to Ms Grove read in part as follows:

As communicated to all staff Friday 6 December [2013], several opportunities have recently arisen for both the Employment and Training departments and as a result the decision by Senior Management has been made to restructure both businesses. In that restructure, there is no requirement for the position ‘Senior Employment Consultant’ at the Nundah branch.

I refer to your conversation today with Emma Callahan, Acting Employment Manager and Dianne Avenell, General Manager Organisation Development and confirm by this letter that your position has been made redundant. We regret that we are not able to offer any other employment that is suitable to you. Your employment with Help Enterprises is hereby terminated, effective as of today’s date.

[9] It should be noted that the announcement of 6 December 2013 as referred to above did not include an announcement that Ms Grove’s position would be made redundant. Ms Grove was informed of that consequence of the restructure at a meeting conducted on 11 December 2013, to which further reference will be made below.

[10] Ms Grove cannot be said to have received any notice of the pending decision prior to being informed that her position was made redundant. Ms Grove claims she did not even receive a letter of termination at the time of her dismissal.

[11] Ms Grove was provided with two week’s notice (given that she is over 45 years of age). Ms Grove had not qualified for redundancy pay as she had not been employed for 12 months. The employer also discharged Ms Grove’s accrued entitlements.

[12] I add at this point that immediately following the termination meeting of 11 December 2013 in which the consequences of the restructure were made known to Ms Grove, Ms Grove allegedly directed an administrative employee to download and provide her with confidential information relating to a job seeker program and other material belonging to the employer. Ms Grove was said to have conducted herself in this way despite having various obligations in relation to confidentiality. This development brought Ms Grove and her former employer into conflict in the post employment period.

[13] Returning now to the issue at hand, Ms Grove argues that at the termination meeting of 11 December 2013 Ms Avenell stated that the ‘Nundah site is now too top-heavy with management”, and that the new Area Manager was going to be positioned at the Nundah site, and that a demoted Area Manager who had run the Strathpine and Toowong sites would be located at Nundah as well. As mentioned above, the Mental Health Program Manager would also be stationed at Nundah.

[14] Ms Grove claims that Ms Avenell went on to comment that “so therefore your position here at the Nundah site is no longer warranted as we have too many managers on site”.

[15] Ms Grove claimed that she was never informed of any redundancy as such. But others at the meeting, including her own support person, Ms Karen Higginson, claimed to the contrary in the course of the evidence.

[16] Ms Grove states that she was not employed to fulfil the role of manager and her role could not have ceased to be required because of the number of managers on site. Ms Grove also claims that she had contributed strongly to the growth in performance of the Nundah site over the course of her eight-month period of employment. Ms Grove contends that she was fulfilling her role successfully and that her dismissal was harsh as a consequence. Ms Grove also claimed that she was “looked upon” as a site manager and performed networking activities with the local Centrelink, which were demonstrative of that role.

[17] Ms Grove also claimed that in January 2014 the employer advertised a number of consultancy positions at its various sites including Nundah. This suggested, Ms Grove claimed, that her position was not made redundant and was still required to be performed by the employer. Thus the redundancy was not genuine, and her dismissal was for other reasons (though these were unstated as there had been no difficulties in the employment relationship prior to December 2013).

[18] Ms Avenell gave evidence as to the nature of the restructure as recounted in summary above.

[19] Ms Avenell stated that in the course of the meeting she was asked by Ms Grove “if there is something in the future” could Ms Grove “come back”. Ms Avenell claimed that she explained to Ms Grove that there were no other senior or employment consultant positions available but that she was welcome to apply for any position that might become available in the new year. Ms Grove contested this, and claimed Ms Avenell had actually insisted she (Ms Grove) would never return to the site. But these were claims that no other witnesses, including Ms Grove’s support person, could sustain.

[20] Ms Avenell conceded in her evidence that the “normal protocols regarding notice of proposed redundancy were not met”, owing to the exigencies which she encountered at the time. That is, the reorganisation was a disruptive process and she sought to expedite the decision-making rather than to prolong the issues and cause anxieties at the site. Ms Avenell claimed that the employer’s business involved dealing with emotionally sensitive clients, including some requiring mental health assistance, and it was desirable to effect staffing changes quickly for that reason.

[21] Ms Emma Callahan, who was the Assistant Employment Manager, gave evidence that because of the disruption caused by the restructure, which included the departure of the General Manager, all pending vacant positions were not actioned. This was because it was necessary to maintain some flexibility about how the business may operate in the future pending the appointment of a new General Manager, in January 2014.

[22] Indeed it is that the incoming General Manager (Ms Nunzia Confessore) appears to have taken up these flexibilities and created a Team Coordinator position to replace the Senior Employment Consultant role performed by Ms Grove. This new position was said to require the skills and experience of a manager as opposed to those of an employment consultant (given the two positions had different functions and the management role required the management of multiple teams of staff across different functions and programmes). The position description for the new role was tendered in these proceedings along with Ms Confessore’s evidence.

[23] There were other positions advertised in the New Year. But these positions arose from resignations from 2 or 3 consultants. These developments came after the 11 December 2013 meeting and they were not foreseen at the time.

[24] Ms Callahan stated that in the meeting of 11 December 2013 she discussed the reasons for Ms Grove’s position being made redundant and that there were no other positions available at that time in the Employment Division. I will add to this discussion a little further below.

Consideration

[25] Before turning to consider the legislative requirements as such, I make mention of a number of observations-cum-findings relevant to this matter.

[26] The termination of Ms Grove’s employment took place in a compacted period of time and there is no surprise that Ms Grove experienced anxieties as a consequence. Her period of notice was paid out in lieu and her employment was terminated at the conclusion of the meeting of 11 December 2013. Equally, however, Ms Grove was not a long-standing employee with many years of service to the employer, which can make worse the experience of redundancy. Ms Grove was employed for a period of some 8 months only. But longevity of service is not always an indicator of the harsh effect of a dismissal. Indeed, the reverse may be the case in certain circumstances. In this case, Ms Grove would hardly suggest that her health and happiness and capacity to earn a living have been left unaffected by the decision made by the employer.

[27] That said, in this matter there is no reason for me to not accept that the decision-making of the employer was genuine and motivated to achieve a more effective organisational structure and profitable business over time. The situation arising from the restructure - as it affected Ms Grove’s position, was put this way in the evidence by Ms Callahan:

Yes, so in terms of the redundancy of this role of senior employment consultant can you explain what the particular changes were in respect of the restructure of the organisation which brought that about?---So before the redundancy was made?

Yes?---Around that time we had put in a tender for some extra mental health contract with Queensland government. That meant that our mental health project coordinator was then moved into a project manager's position and was going to be permanently stationed at the Nundah office. Ramesh Menon who moved into an analyst role he resides close to the Nundah office and it was at that time going to be that he would station himself also at the Nundah office.

Yes?---And that, the Nundah office, was primarily the employment head office so we were stationing Jody Duckworth, the new area manager, upon commencement at that office.

So there would be certain managers who would be placed at that office?
---Correct.

So how does that relate to the role performed by Ms Grove at the time, that of a senior employment consultant and the changes to - the need for that role?---The general duties of the senior employment consultants at that time were the general day-to-day management of the staff, the general day-to-day management of the performances, the generation of income or ensuring that compliance is met so we can be claiming certain fees from the department. These were duties that the mental health project manager were already doing for his division and also filling in for the senior employment consultant on the Nundah office when she was unavailable. 1

[28] Ms Grove may contend that the decision making was unnecessary and that her role should not have been displaced for reasons of the creation of additional management positions at the Nundah site. But in the end, it is the prerogative of management to determine the structure of the business and how it might contribute to its effective operation. There is nothing in the evidence whatsoever to suggest that the decision-making in this regard had as its purpose or had as a collateral purpose the intention to bring about the dismissal of Ms Grove. Ms Grove sought to locate such a motive on the part of her employer at times over the hearing - by reference to a fraud concern she alleged she had communicated. But none of this was in any way sustainable as a proposition of fact and the witness evidence made that so: the decision making of the employer was driven by operational need with negligible regard - if that - for any (claimed) past complaint (if it was that).

[29] As I have mentioned earlier, there appears to have been no sources of distrust or disagreement between the employer and Ms Grove up until the time of the termination taking effect (although that matter was to alter dramatically following the termination meeting of 11 December 2013).

[30] In my view it was a legitimate and unsurprising development that the employer took the decision to change its staffing profile at the Nundah site consequent of the changes in the management structure and number of such personnel on site. These are matters entirely within the prerogative of the employer, as the bearer of risks. The steps taken by the employer were for the purpose of improving the efficient operation of the business and to reduce its operating costs as it repositioned itself in the employment services market. This was the context for the decision making as set out in the communication to staff made on 6 December 2013. I will return to these matters further below.

[31] Section 387 of the Act provides as follows:

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

Consideration of legislative requirements

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)

[32] In the circumstances of a redundancy, such as occurred in this instance, no relevant finding can be made in respect of s.387(a) of the Act. The approach in this respect was set out by the majority of the Full Bench in UES (Int'l) Pty Ltd v Leevan Harvey [2012] FWAFB 5241 (“Re: UES”).

(b) whether the person was notified of that reason

[33] Consistent with the Full Bench in Re: UES, in circumstances of a redundancy for operational reasons, whether or not there was notice of “that reason” (being the valid reason referred to in s.387(a) of the Act) is not material to the wider consideration.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[34] For the reasons given immediately above, this matter too is a neutral matter in respect of a consideration as to whether or not Ms Grove’s termination was harsh, unjust or unreasonable.

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[35] The employer did not unreasonably refuse to allow Ms Grove to have a support person present to assist in any discussions relating to the termination of her employment. In this particular case the employer requested the Applicant obtain the presence of such a support person for the meeting of 11 December 2013.

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[36] The termination of Ms Grove’s employment did not relate to her unsatisfactory performance. This is not a matter relevant to the consideration as to whether Ms Grove’s dismissal was harsh, unjust or unreasonable.

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal

[37] This, too, is not a matter that is relevant to a consideration as to whether Ms Grove’s termination was harsh, unjust or unreasonable and no evidence was led in the proceedings. This is a neutral matter with respect of my wider considerations

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal

[38] As above, this is not a matter that is relevant to my consideration as to whether Ms Grove’s termination was harsh, unjust or unreasonable and no evidence was led in the proceedings. I regard it as a neutral matter with respect to my consideration in this respect.

(h) any other matters that the FWC considers relevant.

[39] I have previously made findings as to the legitimacy of the employer’s decision making in relation to its reorganisation strategy, which resulted in the Applicant’s position being made redundant. The fact that the Applicant’s position was made redundant does not mean that the various duties and responsibilities that are reposed therein ceased to be required to be performed. Those duties and responsibilities can be distributed to another person or two other persons in the organisation. Measures such as this are frequently utilised for the purposes of reducing staffing levels, containing costs and improving productivity. The Explanatory Memorandum to the Fair Work Bill 2008 put the matter this way (though in respect of the requirements of s.389 of the Act):

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 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. Enterprise is defined in clause 12 to mean a business, activity, 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 employee;

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.

[40] The Applicant’s belief that elements of her prior job were still being done by someone else or other persons does not allow me to conclude that there was not a redundancy for operational reasons.

[41] Where an employee’s employment comes to an end for reasons of operational circumstances, such as I have found a case to be here, the reasons for the dismissal are held to be sound and defensible (see Re: UES).

[42] I have accepted above that the circumstances of the dismissal were such that they caused Ms Grove anxiety (though I cannot explain her subsequent conduct in seeking to acquire confidential materials in electronic form upon her departure).

[43] Ms Grove claims she was dealt with harshly in so far as she was not given any prior notice of the redundancy, nor provided with written termination correspondence.

[44] I have made comment earlier as to why the employer acted quickly in relation to the communication of the redundancy. The reasons given are best appreciated by those who understand the nature of the business and its clientele. Ms Grove did not challenge Ms Avenell’s evidence in this respect, or question the legitimacy of her asserted motivation.

[45] I do not think that a great deal turns on whether or not Ms Grove received a written communication about the redundancy. However, I have reached the view that on the balance of probability Ms Grove did receive such correspondence. The witness evidence tended this way, and Ms Grove admitted on my questioning that it was “hard to say” whether or not she received the letter:

So were you given a letter?---It's hard to say because we were walked from that table straight out to get the car signed over, but I did get that letter in a registered post and that was a terminated payment letter. 2

[46] The circumstances of the case did not appear to me to warrant characterisation as being harsh in such a way as to cause me to find adversely in respect of the employer’s overall conduct.

[47] The termination of Ms Grove’s employment was expedited and her circumstances changed very suddenly and unexpectedly. But termination on the basis of notice paid in lieu is not uncommon and does not itself ground a claim for harshness in respect of procedure. What is critical is whether or not the decision making of the employer is sound and sensible and reasonable in this context. Here I have found only that the employer was motivated by operational requirements. There were no conduct or performance issues of any kind raised in respect of Ms Grove prior to 11 December 2013 whereupon she was advised of her dismissal for reasons of redundancy.

[48] Given the restructure and the evidence of both Ms Callahan and Ms Avenell, which I have no reason to set aside on the basis of their performances as witnesses or on the basis of some other contrary claims, I am satisfied that there were no other positions into which Ms Grove could have been redeployed at the time.

[49] True it is that subsequent positions became available in January/February 2014. But at the time of the decision making in relation to Ms Grove’s position, those positions were not available. As is set out above, prospective staffing vacancies were suspended until such time as the new General Manager was provided an opportunity to consider how and if those vacancies might be acted upon or otherwise reconsidered. As it was, the incoming General Manager created a new position on the basis of her assessment of the needs of the organisation. And other vacancies only emerged after the termination - as I have discussed above.

[50] Other vacancies elsewhere in the employer’s business in other divisions may have been available, but these appear to have been trade-based, such as welding. Ms Grove made no comment about such matters and expressed no interest in them at the hearing.

[51] No adverse finding can be made in relation to the employer’s conduct in not entertaining the prospects of redeploying Ms Grove to another position given the circumstances at the time of her dismissal. As I have said above, I have not discerned in the employer’s conduct any malice towards Ms Grove, and this assists me in forming the view I have in this regard about the genuineness of the employer’s conduct.

[52] In all, I do not consider that the dismissal of Ms Grove was harsh unjust or unreasonable.

[53] As a consequence of this finding, Ms Grove’s application under s.394 of the Act is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Ms L. Grove, Applicant

Mr A. Harding, Counsel, for the Respondent

Hearing details:

Brisbane

2014

12 May

 1   Transcript of proceedings dated 12 May 2014, at PNS 694-698.

 2   Transcript of proceedings dated 12 May 2014, at PN 311.

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