Ms Christine Souter v TriCare Limited

[2015] FWC 4398

[2015] FWC 4398

FAIR WORK COMMISSION

DECISION

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

Ms Christine Souter
v
TriCare Limited
(U2015/912)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 2 JULY 2015

Summary: unfair dismissal application - whether application jurisdictionally competent - s.389 - concession that grounds under s.389(1) made out - whether compliance with s.389(2) of the Act - requirement to apply for advertised position - employer doubt as to sales proficiency - unreasonable to require employer to dismiss temporary labour hire employee - Explanatory Memorandum - application under s.394 dismissed.

[1] This decision concerns an application by Ms Christine Souter under s.394 of the Fair Work Act 2009 (“the Act”) seeking an unfair dismissal remedy in respect of her dismissal by TriCare Limited (“the employer”).

[2] Ms Souter had commenced her duties as Sales and Marketing Co-ordinator with the employer on 14 September 2011. She was terminated on 20 February 2015, for reason of her position having become redundant.

[3] The employer contends that Ms Souter’s employment was terminated for reasons of genuine redundancy under s.389 of the Act (to which I will refer below), and as a consequence her application under s.394 of the Act is jurisdictionally incompetent. This is because of s.385(d) of the Act, which provides as follows:

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

[…]

(d) the dismissal was not a case of genuine redundancy.

Ms Souter’s claims

[4] Ms Souter contends that she was the only person employed by the employer in a marketing position. On 12 February 2015 she was approached by Mr Peter O’Shea and invited to attend a meeting with him in the boardroom. Mr O’Shea is one of the employer’s directors. Ms Souter explained that Mr O’Shea advised her that a restructure had taken place as a result of the resignation of the Retirement Living Manager and that as a consequence her role and position had been made redundant. Ms Souter further explained that at this point, Mr O’Shea provided her a typed redundancy letter explaining the terms of the redundancy and the restructure that had been determined by the employer.

[5] Ms Souter contends that Mr O’Shea explained that there were to be four roles in a new department of Sales and Marketing. These roles were Sales and Marketing Manager, Placements Co-ordinator (Aged Care), Placements Co-ordinator (Retirement) and Sales and Marketing Assistant. The Applicant, who had been employed as a Sales and Marketing Co-ordinator, was not redeployed to any of these roles.

[6] Ms Souter claims that her employer considered that she did not have sufficient experience for the role as Sales and Marketing Manager, though she considered that she “did have the relevant experience [and that she] was capable if given a chance with wider authority to do things within the organisation.”

[7] Ms Souter claimed that prior to commencing employment with her employer she had held various other marketing and administrative roles and on one occasion had managed a team of over 20 staff.

[8] As it was, the managerial role was assumed by an employee who had been performing duties in a closely aligned role (at a managerial level). I will discuss this matter further below.

[9] This was similarly the case in respect of the Placements Co-ordinator (Aged Care), which was filled by a person who had performed a role closely aligned to the new position in the prior organisational structure.

[10] The position of Sales and Marketing Assistant was a junior and relatively low level administrative position, essentially at least. Importantly, it was also a temporary position and had been assumed by a temporary employee (on a contract from a labour hire agency) who had been carrying out similar duties (such that the position was said to be little more than a rebadging of the former position as it was brought within the new department).

[11] As such, this was not a position that was newly established as it was a position that continued to be required, albeit in a different location within the organisational structure. Consequently, the incumbent continued to perform largely the same duties as she had previously (and would continue to do so for the balance of the life - of several months - of the temporary position).

[12] Ms Souter claims that another position, for the role of Placements Co-ordinator (Retirement) was also available at the time and that she was advised that she would have to go through a full recruitment process should she wish to apply for that position. Ms Souter elected not to make such an application (for reason that she said she was embarrassed to do so).

[13] The new structure for the employer was announced to staff the following day, Friday 13 February 2015. At that time staff were informed of the changes in the organisation and the identity of those who had been offered new roles was communicated.

[14] As no alternative suitable positions could be identified by the employer, Ms Souter was given four weeks’ notice but by agreement with her employer she was paid time in lieu and her employment came to an end consequently on 20 February 2015. In addition to her notice, Ms Souter was paid seven weeks redundancy pay.

[15] As mentioned above, the employer objects to the substantive application being heard on grounds of “genuine redundancy” under s.389 of the Act.

[16] Section 389 of the Act provides 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.

[17] The onus to make out the grounds under s.389 of the Act falls upon the employer.

[18] The Explanatory Memorandum to the Fair Work Bill 2008 provides some insight into the scope of meaning of a redundancy as contemplated under 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.

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 a dismissal is not a case of genuine redundancy if it would have been reasonable in all the 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. [...] [My emphasis]

[19] At this juncture I indicated that Ms Souter - through her solicitor - has conceded that there was an actual redundancy (for the purposes of s.389(1)(a) of the Act) and not a redundancy contrived for a collateral reason.

[20] The submissions received in respect of Ms Souter’s application initially contended otherwise. However, Ms Souter’s subsequent submissions filed by her solicitor (and confirmed in the hearing) concede that in so far as the duties and tasks associated with Ms Souter’s former position were distributed amongst other staff, her position as it had been was made redundant - and was no longer required - for operational reasons.

[21] There is no argument between the parties that the employer had failed to comply with any obligation under s.389(1)(b) of the Act. The reason for this it appears is that Ms Souter was employed pursuant to a contract of employment dated 29 August 2011, and her terms and conditions of employment were not regulated by a modern award or enterprise agreement made under the Act. As such, the requirements of subsection 389(1)(b) do not apply to the circumstances of Ms Souter’s dismissal.

[22] In light of the above discussion, there is therefore no requirement for me to give consideration to whether the requirements of s.389(1) of the Act are made out.

[23] Ms Souter, however, resists the employer’s argument in respect of the requirements of s.389(2) of the Act. That is, Ms Souter contends that her dismissal was not a case of genuine redundancy because it would have been reasonable in all the circumstances for her to have been redeployed within the employer’s enterprise.

[24] It is to a discussion of the contest in respect of s.389(2) of the Act that I now turn.

[25] Mr Christopher O’Brien, Manager - Human Resources, for the employer gave evidence in the following terms in respect of the circumstances of this case.

[26] Mr O’Brien indicated that the Board of Directors for the employer informed him in February 2015 that the position of Retirement Living Manager would not be replaced upon the resignation of the incumbent. Instead, the Board of Directors communicated to Mr O’Brien that it sought to restructure the Head Office by merging the operations of the Aged Care and Retirement Living managerial functions within the employer’s business into a merged position: Manager - Aged Care and Retirement Living (and subsequently establishing the new department referred to above).

[27] The decision to bring about the restructure and to integrate the management of the two operations impacted upon some 12 positions in Head Office and required changes to functions, amendments to position titles and changes to the lines of reporting and the physical location of various work areas.

[28] Amongst the changes that were required, Mr O’Brien had indicated that a newly created Sales and Marketing Manager position was established and the role of Admissions Assistant was changed to that of Sales and Marketing Assistant, which was to report to the Sales and Marketing Manager. The position of Sales and Marketing Co-ordinator - performed by Ms Souter - was not required in the new structure.

[29] The Board of Directors took the view that the employee (Ms Sutton) who had previously held the position of Care Placements Manager (which was also made redundant in the restructure) would be offered the newly created Sales and Marketing Manager position in the new structure. Ms Sutton accepted the role.

[30] The evidence as led established that Ms Sutton was so offered the role as she had generated very successful sales outcomes in her prior role and the Board wished to see that approach (and Ms Sutton’s particular skills) applied both to the retirement and aged care businesses (which were integrated). Ms Souter’s suitability for the Sales and Marketing Manager role will be discussed in more detail below.

[31] I have referred to the circumstances applying to the administrative assistant role and the Placements Co-ordinator (Aged Care) role above.

[32] There is no dispute that Ms Souter was asked to apply for the position as Placements Co-ordinator (Retirement). Mr O’Brien claimed that Ms Souter “did not appear interested in the position” but had expressed interest in the Sales and Marketing Manager position that had been filled by Ms Sutton. But Ms Souter claimed to the contrary - that she had been interested in the Placements Co-ordinator (Retirement) position but was too embarrassed to apply (she claimed).

[33] Mr O’Shea and Mr O’Brien defended their decision to require Ms Souter to apply for the Placements Co-ordinator (Retirement) position.

[34] Mr O’Shea claimed that he had close understanding of the role performed by Ms Souter and her skills set and was not “convinced” that she (Ms Souter) had an appropriate employment profile to fill a sales role, as the Placements Co-ordinator (Retirement) role was to be. Ms Souter’s prior role had focused upon marketing and could only be described as having a passive function (in so far as she assisted in developing brochures and disseminating information, including at State expos). Mr O’Shea claimed he and the Board had envisaged an active and experienced sales person to sell its products. Mr O’Shea claimed that the business had benefited greatly at its Hay Point site when a former real estate agent had generated significant sales on the basis of his body of experience (and attendant communication skills). In short, Mr O’Shea said the business was seeking a person with that kind of experience, and Ms Souter did not possess experience or demonstrated skills of that kind or degree.

[35] The Position Description for the Placements Co-ordinator (Retirement) role therefore stated that “essential” knowledge, skills and experience included:

“Previous sales or business development experience in a service industry or previous experience in identifying and selling the benefits of products or services to clients.”

[36] The overall purpose of the position was “to maximise sales and revenue goals […] with a view to ensuring the villages capitalise on every opportunity for new and existing business.”

[37] The major tasks or outputs of the position concerned co-ordinating and directing inquiries through to securing sales and identifying “how we can improve our chances of increasing sales.” The person would also train other employees in “professional enquiry management.”

[38] The position, in short, placed a strong emphasis on sales.

[39] Ms Souter complained that with some reasonable training (the nature of which was left undefined) she could have built on her marketing experience and product knowledge in order to fulfil the sales function which was such a significant part of the Placements Co-ordinator (Retirement) role.

[40] Ms Souter may have held this belief genuinely. But it is within the employer’s province, as the bearer of commercial risk, to identify the skills and experience it seeks to apply to achieve its business goals. Mr O’Shea and Mr O’Brien reached their views about the requirements of the business on a reasonable basis. The requirements of the particular role as Placements Co-ordinator (Retirement) was differentiated significantly from that which Ms Souter had performed in her more passive marketing role.

[41] While it was suggested that Ms Souter could have undergone some measure of training to uplift her skills just what this training was in respect of the required type of sales skills, and to what degree it would need to be accessed, was left unstated.

[42] The position description for the Placements Co-ordinator (Retirement) did not specify any formal qualification. Instead, it sought the recruitment of a person who had been immersed in a sales environment and was able to demonstrate adequate competency and successful performance. Perhaps this is because sales related skills (outside of a limited retail setting) arise from a combination of personality type and experience, and are difficult to transfer by way of formal training processes.

[43] Further to this, however, Ms Souter’s curriculum vitae did not demonstrate any prior sales experience of substance. Ms Souter made mention (in her curriculum vitae) of having some experience (on an “occasional” or “casual” basis) selling sports merchandise at Suncorp Stadium. But that is quite a remote experience from selling retirement village accommodation and aged care places, which involve significant asset transfers and detailed financial arrangements.

[44] Ms Souter was invited to apply for the position as Placements Co-ordinator, as the employer held the view that her skills profile did not demonstrate proficiency and experience in a sales environment, and it was for that very purpose (sales generation) that the business had undergone a restructure. By advertising the new position at large, the employer looked to ensure it recruited the best candidate to support its business direction.

[45] Ms Souter, as I mentioned above, sought also to be redeployed to the role of Sales and Marketing Manager in the new structure.

[46] Mr O’Brien contended that there were substantial dissimilarities in Ms Souter’s original role as Sales and Marketing Co-ordinator to the newly created Sales and Marketing Manager position. In summary, these differences were as follows.

[47] The managerial position reported to the combined Retirement and Aged Care Manager (as opposed to the Retirement Living Manager for the Co-ordinator role) and included functions to deliver placement services for both aged care admissions and retirement village sales and to take responsibility for maximising occupancy and revenues and identifying developing business opportunities, amongst other things. The object of the exercise, as I mentioned above, was to focus the role on sales and profit generation (in both the aged care and retirement living businesses).

[48] The managerial role also had enhanced supervisory functions in so far as it required the supervision of the Placements Co-ordinator (Aged Care), the Placements Co-ordinator (Retirement) and the Sales and Marketing Assistant.

[49] Whilst the co-ordinator function focused on more operational considerations, the managerial position required more strategic orientation in so far as it required the identification, implementation and evaluation of marketing opportunities. The managerial role also required consultation with the Retirement and Aged Care Manager to identify strategies for improving occupancy and better utilisation of resources (as a corollary to the above mentioned roles).

[50] The managerial role was also required to develop and maintain annual advertising budgets for both the aged care and retirement living functions in co-ordination with the Retirement and Aged Care Manager.

[51] The managerial position was required to identify threats and opportunity arising from legislative changes and competitive activity, seek out new business opportunities and carry out pricing reviews and build relationships (such as through meeting with referral sources along with other service managers).

[52] The managerial position required the preparation of regular reports on enquiry levels, admissions, competitor pricing and business forecasting. In this regard, the managerial position required the incumbent to undertake “ongoing competitor analysis” and to provide the reporting line for “regular pricing reviews.” The managerial role was also said to have required the preparation of monthly statistical reports for all services.

[53] The managerial role further required the manager to assist with implementation and continuous auditing of the accreditation within villages (and to provide monthly statistical reports to each village on questionnaire responses as part of the same) which was not a function that was relevant to the co-ordinator position.

[54] The managerial role was also responsible for Workplace Health and Safety programmes and assumed human resource responsibilities (in co-ordination with the HR department) as well. The Sales and Marketing Manager role involved developing and delivering training and education to staff and overseeing all processes for enquiries through to sales (without any requirement to confer with any high-level manager within the organisation). The managerial role, consequentially, also involved the training of frontline staff in customer service.

[55] The managerial position was also required to review, formulate and manage waiting lists in consultation with the various co-ordinator positions and service managers.

[56] The performance measures associated with the new managerial role were substantially different from that of Ms Souter’s co-ordinator role.

[57] The employer held the view generally that the managerial position was substantially different to the co-ordinator role performed by Ms Souter and that another employee with demonstrated managerial experience (which was consistent with the more complex skills profile required of the position) would be more suitable for redeployment to that role. As briefly mentioned above, this person was Ms Sutton, who held an existing managerial role (as Care Placements Manager) and had met with what appears to have been demonstrated success in the sales orientation she had brought to that role.

[58] Ms Souter contends, in effect, that she was better qualified than Ms Sutton to perform the managerial role in relation to sales and marketing. In so far as Ms Souter so argues, she is contending that the process of selection for redeployment was unfair or otherwise unreasonable (despite the fact that Ms Sutton was an incumbent manager with the employer).

[59] The process of selection for redeployment is not a consideration for the purposes of s.389 of the Act. The Explanatory Memorandum as set out above makes this clear:

“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.”

[60] The argument led by Ms Souter in this regard - through her solicitor’s written submissions - is not a relevant consideration (and in any event may not succeed on merit grounds, either, given Ms Sutton’s skills profile).

[61] Ms Souter’s argument extends further than this, however. Ms Souter also contends that a new position - Sales and Marketing Assistant - was created as a part of the restructure, though only upon her departure.

[62] Ms Souter contends that this was a role that she could have performed and was well within her range of experience and skills. This was not a position, she argues, which she was offered as an option for purposes of redeployment.

[63] As I have mentioned above, the position was for a fixed term period and was filled by a person who was currently employed in a temporary role in the employer’s enterprise. This position on the available evidence was not a new position but a re-badged position (and hence not the subject of a redeployment).

[64] Notwithstanding, the argument led on Ms Souter’s behalf assumed a redeployment action had occurred and again went to the process of selection for dismissal as opposed to redeployment. The employer took the view (assuming a redeployment had taken place) that the temporary employee as currently engaged would be better suited to perform the temporary role as Sales and Marketing Assistant, particularly given that the position was a junior position relative to Ms Souter’s previous position and was remunerated at a lower level as a consequence.

[65] The process of selection of an employee for dismissal in circumstances where an employer has a choice as to whom it will make redundant, again, is not one that is relevant to the jurisdictional objection under s.389 of the Act.

[66] Further, assuming the Sales and Marketing Assistant position was a new position to which the incumbent had been redeployed, the decision by the employer to utilise the services of an existing temporary person to perform a temporary role in the business which was largely consistent with that person’s current role (in preference to another employee employed in another position on a permanent basis) does not (absent some other telling circumstance) connote unreasonable conduct on the part of the employer.

[67] It also appears to me to be unreasonable to expect that an employer would instigate the dismissal of a person who was subject to a commercial contract for a fixed period so as to give effect to a redeployment of a permanent employee (for the balance of the fixed period). The consequences of a contractual kind (and otherwise) for the employer render the proposition untenable on a test of reasonableness.

[68] That is, even assuming the Sales and Marketing Assistant position was a new position which involved a redeployment action, the employer had reasonable grounds on which to not redeploy Ms Souter to that position. As the Explanatory Memorandum (cited above) makes clear, “there may be many reasons” why it might be reasonable for an employer not to redeploy an employee to a particular position, and this is one such reason.

[69] As I have mentioned above, the Placements Co-ordinator (Aged Care) role had been filled by an employee whose prior position had been in close alignment with the new position. There was little argument put to me that Ms Souter should have been redeployed to that position in preference. Had there been, a further issue would have arisen as to the relevance of the redundancy selection process for the purpose of a consideration under s.389 of the Act.

Conclusion on jurisdictional objection

[70] In view of the above findings, it is demonstrated that the employer has conformed to the requirements of s.389 of the Act and the jurisdictional objection against the substantive matter is upheld as a consequence. Because of the operation of s.385(d) of the Act in conjunction with s.389 of the Act, the application by Ms Souter for an unfair dismissal remedy is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr T. Christie, Solicitor, for the Applicant

Ms R. Kroon, Solicitor, for the Respondent

Hearing details:

Brisbane

2015

25 June

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