Ms Elizabeth Mitchell v Kellogg Brown & Root Pty Ltd T/A KBR

[2016] FWC 7740

[2016] FWC 7740

FAIR WORK COMMISSION

DECISION

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

Ms Elizabeth Mitchell
v
Kellogg Brown & Root Pty Ltd T/A KBR
(U2016/8691)

COMMISSIONER PLATT ADELAIDE, 25 OCTOBER 2016

Application for relief from unfair dismissal – whether termination a genuine redundancy – genuine redundancy - application dismissed.

[1] On 4 August 2015, Ms Mitchell lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal by her former employer Kellogg Brown and Root Pty Ltd T/A KBR (KBR).

[2] At the time of her dismissal, Ms Mitchell was engaged as a part time National Credit Manager working 22.5 hours per week at a rate of $39.00 per hour. The requirements of the position indicate that the role was senior in nature, and required oversight of the credit management and the credit control function. 1

[3] KBR provides engineering services to the infrastructure, resources and government sectors. On 22 June 2016, in order to reduce costs, KBR decided to remove the role of National Credit Manager and redistribute the work to other existing employees. 2 Ms Mitchell was on annual leave at this time and KBR met with her on 7 July 2016, the day after she returned from leave.

[4] On 7 July 2016, KBR advised Ms Mitchell that, in order to meet the on-going operational needs of the business her position would be made redundant from 15 July 2016. KBR enquired as to Ms Mitchell’s capacity to work interstate, advised her that they were looking at alternative roles, and informed her of outplacement and EAP services, and her redundancy entitlements. This information was confirmed in writing. 3

[5] KBR examined alternative roles by reviewing vacancies and sending out an email to all HR business partners. 4 At that time, KBR was recruiting for the role of Administrative Specialist/Contracts Administrator.5 KBR did not consider Ms Mitchell’s skill set to be suitable for the role. KBR’s view is that Ms Mitchell only possessed 25% of the skills set for this role, whereas Ms Mitchell’s believes she held 75% of the skilled required. As it turned out the role was not filled, as it was conditional on the award of a defence contract which was not secured. This occurred about two weeks after the date of dismissal.

Was the dismissal a genuine redundancy?

[6] Section 389 of the Act states:

“389 Meaning of genuine redundancy

389(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.

389(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.”

[7] KBR submitted that the dismissal was the result of the need to reduce costs as a result of declining contract awards, particularly in the resources sector. Ms Mitchell contended that aspects of her role continued to be performed. This is not disputed by KBR, Ms Mitchell’s work was undertaken by two existing employees after her departure. The redistribution of work to existing employees is not inconsistent with the job no longer being required to be performed by anyone because of changes in the operational requirements. 6 I find that the requirements of s.389(1)(a) of the Act have been met.

[8] KBR is required to meet the consultation obligations in any applicable modern award or enterprise agreement. It was not suggested that Ms Mitchell’s work is covered by an Agreement. There was debate as to whether Ms Mitchell’s role was covered by the Clerks – Private Sector Award 2010 (the Award). KBR contended that it was covered, and Ms Mitchell argued that she was not covered. Having reviewed Schedule B – Classifications of the Award, I am not convinced Ms Mitchell’s role was covered by the Award however, the employer’s consultation processes appears to meet the requirements of clause 8.1 of the Award. I find that the consultation requirements in s.389(1)(b) of the Act have been met.

[9] From the evidence before me, the employer attempted to redeploy Ms Mitchell to another role. Whilst there is a debate between the parties on Ms Mitchell’s suitability for the ‘Team Assistant’ role, ultimately that role was withdrawn and not filled, as it was not required. On that basis, it would not have been reasonable in the circumstances for Ms Mitchell to be redeployed in that role. There was no suggestion that any other roles were available. I find that the redeployment obligations in s.389(2) of the Act have been met.

[10] In light of the findings above I find that the dismissal was a genuine redundancy pursuant to s.389 of the Act, and accordingly Ms Mitchell has not been unfairly dismissed within the meaning of s.385 of the Act.

[11] I have considered my consideration if the dismissal was harsh, unjust or unreasonable pursuant to s.387 of the Act, if I was in error in finding that the dismissal was a genuine redundancy.

Was the dismissal harsh unjust or unreasonable?

[12] Pursuant to s.387 of the Act, 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.”

Section 387(a)

[13] Notwithstanding its formulation under a different legislative environment, I have adopted the definition of a valid reason set out by Northrop J in Selvachandran v Peteron Plastics Pty Ltd⁷which requires the reason for termination to be “sound, defensible or well founded.”

[14] The reason for the dismissal of Ms Mitchell was related to the need to reduce costs, accordingly there was no valid reason for the dismissal related to her capacity or conduct. I would regard this as a neutral factor in determining whether the dismissal was harsh, unjust or unreasonable.

Sections 387(b) and (c)

[15] The matters in s.387(b) and (c) of the Act deal with whether there was procedural fairness in respect of a dismissal related to capacity or conduct. As stated above, I have found that Ms Mitchell’s dismissal was not related to her capacity or conduct and therefore, it must follow that she was not notified of or given an opportunity to respond to a reason for his dismissal related to his capacity or conduct. However, given the reasons for her dismissal, I regard these as neutral matters with respect to my consideration as to whether the dismissal was harsh, unjust or unreasonable.

Section 387(d)

[16] There is no evidence before me that Ms Mitchell requested a support person to attend the meeting on 7 July 2016. I regard this as a neutral matter as to whether the dismissal was harsh, unjust or unreasonable.

Section 387(e)

[17] Ms Mitchell’s dismissal did not relate to unsatisfactory performance so this matter is not relevant to my consideration as to whether the dismissal was harsh, unjust or unreasonable.

Sections 387(f) and (g)

[18] KBR is a large employer and has an internal human resource management capability I regard this as a neutral matter as to whether the dismissal was harsh, unjust or unreasonable.

Section 387(h)

[19] As I have discussed earlier, there was a sound, defensible and well-founded reason for Ms Mitchell’s dismissal. That is that that KBR no longer required Ms Mitchell’s position to be performed by anyone because of the change in the operational requirements of the business, that KBR had met its consultation requirements (even if the Award applied) and it was not reasonable in the circumstances for KBR to redeploy Ms Mitchell. I also note that Ms Mitchell was paid five weeks’ notice and 22 weeks’ severance pay by KBR and secured full time employment (albeit at a reduced hourly rate) 13 weeks after her dismissal. These are matters that weigh against a conclusion that the dismissal was harsh, unjust or unreasonable.

Conclusion

[20] Having considered each of the factors detailed in s.387 of the Act, I have concluded that the dismissal of Ms Mitchell was not harsh, unjust or unreasonable.

[21] The application will be dismissed and an Order 8 giving effect to this decision will be issued.

COMMISSIONER

Appearances:

E Mitchell, on her own behalf.

B Benson and K Demianova, on behalf of the Respondent.

Hearing details:

2016.

Adelaide:

October 20.

 1   Exhibit R6.

 2   Exhibit R4.

 3   Exhibit A3.

 4   Exhibit R5.

 5   Exhibit R7.

 6   Ulan Coal Mines Ltd v Howarth (2010) 196 IR 32 [17].

7 (1995) 62 IR 371 at 373.

 8   PR586884.

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