Ms Deborah Hallam v Sodexo Remote Sites Australia Pty Ltd
[2018] FWCFB 1496
•15 MARCH 2018
| [2018] FWCFB 1496 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Ms Deborah Hallam
v
Sodexo Remote Sites Australia Pty Ltd
(C2017/4642)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 15 MARCH 2018 |
Appeal against decision [2017] FWC 4105 of Commissioner Spencer in Brisbane on 4 August 2017 in matter number U2017/3968.
[1] Deborah Hallam was employed by Sodexo Remote Sites Australia Pty Ltd (Sodexo). Her position was made redundant and she was dismissed on 24 March 2017. At the time of dismissal, she was employed as a full time fly in, fly out “Relief Project Manager” in one of the company’s ‘relief pool’, which backfilled positions at various worksites during periods of employee absence. She had not been rostered to work since September 2016.
[2] On 4 August 2017, Commissioner Spencer dismissed an application by Ms Hallam for a remedy in relation to unfair dismissal under s.394 of the Fair Work Act 2009 (FW Act) (the Decision).
[3] On 19 December 2017, we granted Ms Hallam permission to appeal the Decision after identifying an arguable error in relation to the Commissioner’s application of section 389(1)(b) of the FW Act. No other arguable case of appealable error was identified in the Decision. We concluded:
[38] The Commissioner considered the consultation processes undertaken by Sodexo. However, it is at least arguable that she did not make a finding about whether there was an obligation to consult under the relevant award or agreement. A failure to make such a finding would have the result that the Commissioner could not have been satisfied that the criterion in subsection 389(1)(b) had been met. Accordingly, we consider that an arguable case of appealable error is established. [Endnote omitted]
[4] On 14 and 15 February 2018 the parties consented to the appeal being determined on the papers. This decision deals with the appeal.
Relevant law
[5] Under section 385 of the FW Act, a person has not been unfairly dismissed if their dismissal was a case of genuine redundancy. The expression ‘genuine redundancy’ is defined in section 389 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.”
[6] A dismissal is not a ‘genuine redundancy’ if the employer has not complied with any obligation in a modern award or enterprise agreement that applied to Ms Hallam’s employment and required it to consult about the redundancy. 1 In order for such a finding to be made, it is first necessary to determine whether there was a relevant modern award or enterprise agreement consultation obligation.
The Decision
[7] The question of whether a modern award or enterprise agreement applied to Ms Hallam was in issue in the proceedings.
[8] The Commissioner considered the requirements of section 389(1)(b) from paragraphs [71] to [75] of the Decision. 2 Relevantly, she observed that:
s.389(1)(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
[71] In relation to considering the consultation obligations under the Agreement, whilst cl.11 does not name Relief Project Manager as a relevant position, the list of positions is not exhaustive. Further, the duties performed by the Applicant, had similarities to some of the duties of various positions explicitly identified.
[72] Clause 11 of the Agreement states:
“11. CLASSIFICATIONS
Employees will be employed at the following levels as determined by the Company:
Level | Hospitality and Facility Management Stream | Facility Maintenance Stream |
Typical positions & duties of position. | ||
1 | Typically. includes positions requiring at least an AQF Certificate IV or equivalent skill gained through experience, such as: ● Catering Manager | Facility Maintainer 1: Typically includes positions requiring at least an AQF Certificate IV or equivalent skill gained through experience, such as: ● Highly skilled building and related maintenance tradespersons with post trade qualifications, demonstrable capacity to repair and maintain complex equipment or systems; or cross trade qualifications (includes Plumber, Gas Fitter, Electrician, Refrigeration Mechanic/Air Conditional Mechanic, Carpenter). |
2 | Typically includes positions requiring at least an AQF Certificate III or equivalent skill gained through experience, such as: ● Qualified Chef | Facility Maintainer 2: Typically includes positions requiring at least an AQF Certificate III or equivalent skill gained through experience, such as: ● Base qualified building and related maintenance tradespersons (includes but not limited to Water Treatment Plant Operator, Sewage Treatment Plant Operator) |
…”
[73] On the basis that the Applicant’s employment was covered by the Agreement, and the consultation obligations in the Agreement, were required to be observed by the Respondent, the case of Ulan Coal Mine Limited v Howarth & Ors is relevant to the required consultation:
“[31] We do not consider, in the particular circumstances of the present matter and having regard to the obligation under sub-clause 23.1 of the Agreement, that a further round of discussions was required to be held by the Company with the employees to be dismissed, either separately or as a group. This does not mean that such separate discussions might not be worthwhile and appropriate e.g. as part of the consideration of measures to mitigate the adverse affects of terminations or to ensure that opportunities for other employment and assistance are properly examined. However they are not part of the discussions envisaged and required under sub-clause 23.1 of the Agreement and that is the test in these particular circumstances. In different circumstances this will of course vary according to the terms of particular awards and agreements.”
[74] It is noted, however that the Applicant did not seek to rely on a failure to consult as to the operational decision, as grounds to dismiss the jurisdictional objection. The Applicant’s submissions relating to consultation and mitigation, were made in reference to the “reasonableness” element of s.389(2), in relation to redeployment. The Applicant’s representative noted the time lag between when the decision was made to approve the strategy to remove the relief pools, and when the employees were told, and how it impacted on the redeployment process. The Applicant argued that if the employees had been notified or consulted at an earlier stage, jobs that were available at an earlier time (than when they were notified) could have been isolated for the redeployment exercise.
[75] Consideration has been given to the processes engaged in by the Respondent, to consult with the Applicant, regarding the redundancy decision.
[Footnotes omitted]
[9] At paragraphs [109] – [112]of the Decision 3,the Commissionerset outher findings:
[109] Having regard to the matters outlined above, and in particular the requirements of s.389(2) of the Act, the Respondent has satisfied that the termination of the Applicant’s employment was a case of genuine redundancy.
[110] Having stated this, the Respondent is a significant employer and it would have been reasonable for the Respondent to notify the Applicant of the redundancy, at an earlier date, and commence exploring redeployment opportunities at that time. It would also have been reasonable to properly consult with the Applicant, regarding the requirements of specific positions identified as possible avenues for redeployment, and provide all relevant information with the group of positions at the earliest stage. Whilst these are noted as deficiencies, the evidence does not confirm that there would have been a different redeployment outcome, in the circumstances where the Respondent was changing its operations.
[111] However, the Applicant was also requested to express interest in positions. The Respondent argued that the Applicant had been confrontational during the redeployment process, and was not reasonably proactive or responsive during the redeployment period. It may have been appropriate to adapt the procedures to account for the periods where there were lapses in communication between the parties. Expanding the period or commencing redeployment consultation earlier, and providing a full list of potential alternative jobs with sufficient information for the Applicant to express relevant interest, may have accommodated this.
[112] However, this does not overcome the case that there was not a suitable position, within the Respondent’s or its associated entities’ enterprises, that the Applicant could have been reasonably redeployed to. Accordingly, despite the identified procedural deficiencies, they are not considered to be fatal to the Respondent’s procedure, and the jurisdictional objection must be upheld. Consultation was engaged in, and a reasonable redeployment exercise occurred. An alternative position was not available on the evidence, and therefore, it was not reasonable in the circumstances to redeploy the Applicant.
[113] Having taken into account all of the facts and circumstances, against the legislative tests, the dismissal is considered to be a case of genuine redundancy, in accordance with s.387 of the Act. The substantive application made pursuant to s.394 of the Act is therefore, dismissed.
[Footnotes omitted]
[10] The Commissioner clearly considered the question of consultation under the Agreement. She took into account the Agreement’s classification structure and made a number of observations suggesting at least a preliminary view that the Agreement might apply to Ms Hallam. However, there is no reference to any actual obligation to consult about redundancy either under a modern award or the Agreement in the Decision, and in particular whether such consultation obligations applied or had been met.
[11] We consider it likely that the approach adopted in the Decision was informed by the way the matter was conducted, as the obligation to consult was not central to the issues in dispute. Nevertheless, the finding at [112] of the Decision that “consultation was engaged in” was not a finding that consultation obligations under the relevant modern award or enterprise agreement had been met.
[12] In our view, a fair reading of the Decision leads to the conclusion that no finding was made on whether the criterion in subsection 389(1)(b) of the FW Act had been met. There is no express finding, and we do not consider that one can be inferred. The Commissioner could not therefore have been satisfied that the dismissal was a genuine redundancy. Her conclusion at [113] of the Decision to that effect was a jurisdictional error.
[13] We uphold the appeal on the basis of the error identified and quash the Decision.
[14] In her written submissions, the appellant contended that, should the Full Bench quash the Decision, the appropriate course would be for us to refer the matter to a member of the Commission to be decided afresh. 4 Ms Hallam submitted that she wished to have the opportunity to convince the Commission that, taking into account new evidence, it would have been reasonable for the company to redeploy her. However, as we noted when rejecting the appellant’s application to the Full Bench for leave to adduce fresh evidence on appeal, there is no explanation as to why the evidence in question could not have been identified earlier through the usual processes and put before the Commissioner at first instance. In our opinion, the appropriate course is for us now to proceed to re-determine the jurisdictional objection.
Was the dismissal a ‘genuine redundancy’?
[15] The facts in this matter which are either agreed or do not appear to be contested are summarised below.
1. Ms Hallam was employed by Sodexo on or about 5 November 2006 in the role of ‘domestic’. 5
2. From on or about 1 March 2014, Ms Hallam was employed in the role of “Relief Project Manager” working in one of four ‘relief pools’ operated by Sodexo. 6
3. On 12 May 2016, a significant client of Sodexo asked it not to return Ms Hallam to work sites operated by the client. 7
4. Ms Hallam remained employed and paid as a permanent member of the ‘relief pool’, but from 20 September 2016 she did not perform any work for Sodexo.
5. In late 2016 / early 2017, Sodexo embarked on a process of terminating the four ‘relief pools’ after a business decision to outsource the function to third party labour agencies as required. 8
6. On 24 February 2017, Ms Hallam was sent a letter advising of her redundancy and that she should “consider other suitable redeployment opportunities within the business”. The letter enclosed a “full list of current vacancies within our business nationally” and invited her to “notify” Sodexo of any position on the list she was interested in, by reference to work location and her knowledge, skills, experience, qualifications and licenses. 9 Ms Hallam did not receive the letter until 2 March 2017.10
7. Between 2 March 2017 and 24 March 2017, Ms Hallam and Sodexo exchanged correspondence about the redundancy, potential alternative roles for Ms Hallam and the redeployment process. Potential redeployment opportunities for Ms Hallam were identified by Sodexo during that period but none were the subject of an expression of interest from Ms Hallam. 11
8. On 24 March 2017, Ms Hallam’s employment was terminated on the grounds of redundancy. 12
[16] Under section 385 of the FW Act, a person has been unfairly dismissed if the Commission is satisfied of certain matters, including that the dismissal was not a case of genuine redundancy.
[17] Section 389 of the FW Act defines ‘genuine redundancy’ as set out earlier.
[18] Sodexo objected to Ms Hallam’s application for an unfair dismissal remedy on the basis that her dismissal was a case of genuine redundancy. Ms Hallam disagreed, primarily on the basis that it would have been reasonable in all the circumstances for her to be redeployed.
[19] It is thus necessary to determine whether the dismissal was a case of genuine redundancy for the purposes of section 389 of the FW Act.
[20] In this regard, we are satisfied that Ms Hallam’s job was no longer required to be performed by anyone because of changes in Sodexo’s operational requirements. We accept Sodexo’s evidence that a business decision was made, and subsequently implemented, to terminate the four relief pools in favour of reliance on third party labour agencies as required. 13 This evidence was not challenged in any meaningful way. In our view, the change was a change in Sodexo’s operational requirements which ultimately meant that none of the jobs held by employees in the relief pools, including that of Relief Project Manager, were required by Sodexo to be performed by anyone.
[21] For the reasons set out in our earlier decision 14, we are also satisfied that it would not have been reasonable in all the circumstances for Ms Hallam to be redeployed in either Sodexo’s enterprise or that of its associated entities, IFM Services Pty Ltd or Sodexo Australia Pty Ltd. The evidence simply did not reach the requisite threshold.
[22] That leaves the question of whether Sodexo complied with any obligation in a modern award or enterprise agreement that applied to Ms Hallam’s employment to consult about the redundancy. To answer that question, it is necessary to determine whether any such obligation arose.
[23] According to Sodexo, the Hospitality Industry (General) Award 2010 15 (the Award) applies to Sodexo’s business. For present purposes, we accept Sodexo’s implicit concession that it is an employer in the hospitality industry to which the Award applies. However, neither party submitted that the Award covered Ms Hallam’s employment and we are satisfied that it did not.
[24] A modern award covers an employee if the award is expressed to cover the employee. 16 In this case, the Award is an industry award that covers:
“…employers throughout Australia in the hospitality industry and their employees in the classifications within Schedule D—Classification Definitions to the exclusion of any other modern award.”
[25] The “principal purpose test” is also relevant to whether an employee is covered by a modern award or enterprise agreement. 17 The test was summarised in Carpenter v Corona Manufacturing18as follows:
“In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed. In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not "employed in the process, trade, business or occupation of ... soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials" and was not, therefore, covered by the Award.”
[26] At the time of dismissal, Ms Hallam was employed as “Relief Project Manager”. This role required her “to manage and have full accountability for managing the work site”. 19 She described this as:
“The daily running of the site in its entirety. The whole village. Kitchen, dining room, cleaning, administration, accommodation, payroll. Whether or not it had a cabin. Some do not. Maintenance, grounds, utilities. It can be buses. The whole shebang.” 20
[27] Relevantly, an earlier job description for the role of “Project Manager” describes the purpose of the role as “to ensure the effective management of all aspects of the service agreement and agreed Key Performance Indicators with client in order to ensure the optimum performance of the site. To ensure that the highest achievable quality is maintained and meets the scope of work within budget.” Indicative duties for the role include a range of managerial functions, including implementing and applying quality assurance procedures, ensuring compliance with relevant laws and contracts, managing workplace performance and overseeing disciplinary action, managing ‘core business’ on site including in health and safety, catering and accommodation packages, cleaning standards, care and security of company property and monies as well as delivery of training. 21
[28] Schedule D to the Award sets out the range of classifications covered by its terms. They include food and beverage attendant, kitchen attendant and cook, guest service and front office employee, administrative and security staff, leisure attendant, storeperson and gardener. Some of the classifications progress to a supervisory level within the relevant stream.
[29] As far as “managerial staff” are concerned, the Award contains the classification of “Hotel Manager”. For the purpose of the classification, “hotel” is broadly defined to cover a range of retail licensed establishments. It is not clear on the evidence whether the projects Ms Hallam managed involved retail licensed establishments. That aside, a Hotel Manager under the Award is an employee (however designated) who:
• under the direction of senior management is required to manage and co-ordinate the activities of a relevant area or areas of the hotel; and
• directs staff to ensure they carry out their duties in the relevant area or areas of the hotel; and
• implements policies, procedures and operating systems for the hotel.
[30] Indicative positions within the scope of the “Hotel Manager” classification include “Duty manager”, “Assistant food and beverage manager” and other equivalent positions.
[31] Senior management employees with responsibility for a significant area of operations of one or more “hotels” are excluded from the definition of Hotel Manager. Indicative roles include Venue manager, General/hotel manager and Regional manager.
[32] In our view, the type of manager covered by the Award is one with responsibility for a particular shift or function within a hotel as defined. It does not extend to managers who have general responsibility for a venue, site or region.
[33] This is in contrast to Ms Hallam’s role, which at the time of dismissal, was to manage and have general responsibility for work sites as required. Her role was not limited to the management of discrete shifts or functions at those sites. Her level of responsibility and the range of duties which she was contracted to perform were akin to the type of roles expressly excluded from the Hotel Manager classification. In our view, no other Award classification was sufficiently broad to align with the principal purpose of Ms Hallam’s role. Accordingly, we find that Ms Hallam was not covered by the Award.
[34] We now turn to consider the Agreement. Under section 53 of the Act, an enterprise agreement covers an employee if the agreement is expressed to cover the employee.
[35] Sodexo’s national onshore business is covered by the Sodexo Remote Sites Onshore Enterprise Agreement 2013 22(the Agreement). Ms Hallam argued that her role was classified as Level 2 in the Hospitality and Facility Management Stream of the Agreement because she regularly performed the duties of positions identified by way of example in that classification. Sodexo disagreed and relied on the principal purpose test to submit that Ms Hallam’s role was not covered by either the Award or the Agreement.
[36] Clause 3 of the Agreement provides as follows:
“This Agreement shall cover and apply to Sodexo Remote Sites Australia Pty Ltd (“the Company”) in respect of all employees (excluding employees on supported wage systems or those covered by a site specific enterprise agreement), employed throughout Australia engaged in the classifications contained in this Agreement to provide catering, cleaning, facilities management and related services to the onshore resources sector and construction industry which includes but is not limited to operations such as construction, mining, milling, smelting, refining and processing of minerals and hydrocarbons (“Employees”).”
[37] The classifications in the Agreement are set out in clause 11. They are divided into two classification streams: “Hospitality and Facility Management Stream” and “Facility Maintenance Stream”. There was no suggestion that Ms Hallam was covered by the Facility Maintenance Stream and having reviewed the typical positions and duties of positions falling within that stream, it does not appear relevant to her role.
[38] The Hospitality and Facility Management Stream in the Agreement is divided into Levels 1 to 4. Level 1 is described as typically including “positions requiring at least an AQF Certificate IV or equivalent skill gained through experience, such as: Catering Manager, Head Chef or Executive Chef.” There was no suggestion that Ms Hallam fell within this Level. She had worked in and around Sodexo client sites for more than 10 years and had completed Year 12, a Certificate III in Business Administration in 2004 and a Diploma of Management. 23 She was not a qualified Chef and the only direct evidence about the Catering Manager role indicated a requirement for a Bachelor degree or equivalent. We are satisfied that Ms Hallam was not a Level 1 employee in the Hospitality and Facility Management Stream of the Award.
[39] Level 3 of the Hospitality and Facility Management Stream covers lower level classifications including Service Attendant, Accommodation Clerk and Receptionist. Level 4 covers Hospitality Apprentices and Trainees. Neither party submitted that either the Level 3 or Level 4 classification applied to Ms Hallam. We are satisfied on the evidence that her role was more senior than any of the roles within the scope of Level 3 or 4.
[40] That leaves Level 2 in the Hospitality and Facility Management Stream, which is described as typically including “positions requiring at least an AQF Certificate III or equivalent skill gained through experience. Indicative positions include Qualified Chef, Administration Manager, Accommodation Manager, Bar Manager/ Tavern Manager, Security Supervisor, Parks and Gardens Manager, Airport Manager, Village Services Manager, Cleaning Manager, Reporting Officer, Warehouse Manager and Horticulturalist. Ms Hallam identified the roles of Administration Manager, Accommodation Manager, and Village Services Manager as indicating that the Agreement might apply or ought to be applied to her employment, as she performed some of the functions inherent in those roles.
[41] Sodexo submitted job descriptions for the classifications of Administration Manager and Site/Accommodation Manager in support of its submission that neither was applicable to Ms Hallam. The job description for Administration Manager states that the role reports to the Project Manager. The purpose of the role is to act as the site’s “front office representative”, responsible for office duties as required by the individual site, including managing the site administration team. 24 In other words, it manages the administration function on a particular site.
[42] Similarly, the job description for Site/Accommodation Manager makes clear that the role reports to the Project Manager. Its purpose is described as “provision of supervision to domestic staff ensuring a high standard of cleaning is maintained. Front office representative. Also responsible for the allocation of accommodation”. 25 That is, it manages the accommodation on the particular site.
[43] Sodexo tendered a “Project Management Structure” which shows the role of Project Manager overseeing six discrete service areas (Accommodation Services, Catering Services, Cleaning and Janitorial Services, Maintenance Services, Retail and Recreation Services and Security Services). 26 This is consistent with Ms Hallam’s own evidence that in her role, she was “to manage and have full accountability for managing the work site”.27
[44] No relevant evidence was led as to the role of Village Services Manager and there is no suggestion that such evidence was not available or could not have been adduced at first instance.
[45] In the same way as the Award classification of Hotel Manager is confined to employees who manage discrete shifts or functions, the “managers” covered by the Agreement appear to us to be those with responsibility for particular functions within a site. Examples include responsibility for site administration, accommodation, the bar, site security or cleaning. It does not extend to employees with overall site or project management responsibility. That the Agreement applied to employees with a lower level of responsibility than Ms Hallam is supported by Ms Hallam’s own evidence that she managed employees who were covered by the Agreement. 28 We also note her evidence that rates of pay for management were not included in the Schedule of Rates in the Agreement, and that while some managers were covered by the Agreement, others were not.29
[46] We find that Ms Hallam’s role was not covered by the Agreement.
[47] It follows that there was no relevant obligation on Sodexo in a modern award or enterprise agreement that applied to Ms Hallam’s employment to consult with her about the redundancy.
[48] In the result, Ms Hallam’s dismissal was a case of genuine redundancy. Her application must be dismissed.
DEPUTY PRESIDENT
Final written submissions:
Appellant’s Outline of Submissions dated 19 January 2018.
Respondent’s Outline of Submissions dated 5 February 2018.
Appellant’s Outline of Submissions in Reply dated 13 February 2018.
1 Fair Work Act 2009 (Cth), s.389(1)(a)
2 Hallam v Sodexo Remote Sites Australia Pty Ltd [2017] FWC 4105 Decision at [71] - [75]
3 Hallam v Sodexo Remote Sites Australia Pty Ltd [2017] FWC 4105 Decision at [109] - [112]
4 Appellants' submissions paragraph 12 and following
5 AB317
6 AB308
7 AB387
8 Exhibit 4
9 AB342
10 AB418-9
11 Exhibit 1; AB295-397
12 AB397
13 Exhibit 4
14 [2017] FWCFB 6847
15 MA000009
16 Fair Work Act 2009 (Cth), s.48.
17 See, for example, Graham v Globus Medical Australia Pty Ltd[2016] FWCFB 5495; McMenemy v Thomas Duryea Consulting Pty Ltd [2012] FWAFB 7184; Layton v North Goonyella Coal Mines Pty Ltd [2007] AIRCFB 713; The Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd[2014] FWCFB 5643
18 122 IR 387 (AIRC, 17 December 2002) at [9].
19 AB53
20 AB79
21 AB263
22 AE405048
23 AB60
24 AB268
25 AB271
26 AB267
27 AB53
28 AB54-5
29 AB454-5
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