Ms Selina Mossman v Veolia Environmental Services

[2016] FWC 6043

[2016] FWC 6043

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Ms Selina Mossman

v

Veolia Environmental Services

(U2016/8284)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 2 September 2016

Unfair dismissal application – jurisdictional objection – s.389 of the Act - whether redeployment reasonable - requirement to apply for new, vacant position – circumstances distinguished from obiter comments in Full Bench in Re: Ulan Coal Mines – Re:Ulan’s “hypothetical employee” distinguished

[1] This decision concerns the determination of a jurisdictional objection in respect of an application m ade by Ms Selina Mossman under s.394 of the Fair Work Act 2009 (“the Act”), by means of which Ms Mossman sought an unfair dismissal remedy arising from her dismissal by Veolia Environmental Services (Australia) Pty Ltd (“ the employer”) on 20 June 2016.

[2] At the outset I indicate that there is no challenge to the proposition that Ms Mossman is a national system employee who is protected from unfair dismissal, and that the employer is a national system employer (for the purposes of s.380 and s.382 of the Act).

[3] The jurisdictional objection raised by the employer in defence of the application is consequential to s.385(d) of the Act.

[4] Section 385 of the Act states as follows:

What is an unfair dismissal

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

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy. [My emphasis]

[5] The employer argues that the dismissal was not an unfair dismissal because it was a case of genuine redundancy.

[6] A genuine redundancy is defined at s.389 of the Act.

[7] 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.

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

[9] The Explanatory Memorandum to the Fair Work Bill 2008 (“the Explanatory Memorandum”) provides some insight into the scope of meaning of a genuine redundancy, as contemplated under the Act. The Explanatory Memorandum is not exhaustive in this regard.

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.

[10] Ms Mossman was employed ain an administration role, and performed duties out of the Gladstone office of the employer. Ms Mossman’s employer contends that Ms Mossman was terminated because of genuine redundancy.

[11] Ms Mossman did not lead any evidence personally, nor did she seek to rely on any written submissions beyond her initial application, though she did lead one witness in her support, Ms Michelle Cronin.

[12] The evidence led by Mr Steve Rohloff, Manager – Industrial Markets for the employer, was to the effect that there had been a review of the employer’s business in Gladstone and because of the declining market (largely because of declining industrial markets generally and in particular the loss of a contract with a large mining company) the number of office administrators required by the employer at the Gladstone office was decreased.

[13] Mr Rohloff explained that he had attended a workshop in April 2016 conducted for the purposes of examining how costs in Gladstone could be reduced in the context of the declining market. A by-product of the review conducted by the workshop was that a new organisational structure was propounded which, following further consideration by the employer, was ultimately put to the supervisory staff (or largely so) on 10 May 2016.

[14] At that meeting the relevant staff were informed, according to Mr Rohloff, of the reasons for the proposed changes, the business objectives, and the change proposal itself. As of 10 May 2016, Mr Rohloff contended that there had been no final decision made in relation to the changes and their still remained internal processes to complete.

[15] Ms Penny Washington, the HR Advisor for the employer, was in attendance at the meeting and gave evidence that at that time, the employees were encouraged to ask questions and to provide feedback for any suggestions or ideas they had for cost reductions. Ms Washington recalls that Ms Mossman did not ask any questions at the meeting.

[16] There was some difference in the evidence between the parties on this point. Ms Cronin, who I mentioned earlier as giving evidence at Ms Mossman’s request, claimed that she had conveyed the contents of the meeting to her staff, which included Ms Mossman, on 11 May 2016, following the meeting of 10 May 2016. That is, contrary to the claims of the employer, Ms Mossman was not in attendance at the meeting 10 May 2016 (which had principally comprised supervisory staff). Ms Mossman did not lead any evidence herself in relation to this matter.

[17] On 16 May 2016 internal approval was obtained for the redundancies, following the formal acceptance of the changed organisational structure for the Gladstone business.

[18] Mr Rohloff explained that there had been an earlier tranche of redundancies which had reduced the workload in Gladstone. The reduced headcount in Gladstone meant that there was no longer any need for three administration positions, particularly given that there were also administration resources in Brisbane that could be called upon by the Gladstone office as required.

[19] One of the three administration positions was made redundant following the ordinary turnover of labour. This meant two administration positions remained. The employer only required one of those positions to be retained to service its business needs, whilst the other one was redundant for its business purposes.

[20] Of the two remaining administration positions, one was filled by Ms Mossman and the other by an employee named Ms Marissa Cross.

[21] The two remaining administrative positions differed slightly from one another. Ms Cross’ role was said by her to have included some human resource related duties which were separately designated, but her general administration duties were, on the evidence before the Commission, identical or very similar to those of Ms Mossman.

[22] Some of the duties performed by Ms Cross and Ms Mossman were said to be able to be allocated to Brisbane based administrative staff. Some of Ms Mossman’s duties in relation to job completion confirmation and billing, were transferred to a new position of Fleet Controller based in Gladstone.

[23] Because a range of the duties between the two positions had been transferred to alternative positions, Mr Rohloff explained that it was now possible to combine the two administration roles into one position. The new position was not identical to that of either of Ms Mossman or Ms Cross’ prior positions, as it amalgamated a range of residual duties in the one new position - Administrator – Industrial Services. That is to say, as Ms Washington explained in her evidence, the new position included general administration duties as well as human resource related duties, along with other tasks relating to creating and managing purchase orders and invoicing. The reporting relationship also differed.

[24] The employer met with Ms Mossman along with other employees on 18 and 19 May 2016, and outlined the changes in the organisational structure and the alterations to specific roles therein. At that time, Mr Rohloff and Mr Jim O’Donnell, the Operations Manager in Gladstone, both spoke with Ms Mossman about the changes and encouraged her to apply for the new administrative position along with the new position of Fleet Controller. Ms Washington suggested that Ms Mossman was also informed that there was a role as an Area Manager Sales vacant in Gladstone, should she wish to apply for it (though Ms Washington recalled that Ms Mossman declined an opportunity to consider that position ).

[25] Ms Mossman indicated that she intended to apply for the remaining administrator position and took the position description for that purpose. According to Ms Washington, Ms Mossman expressly stated that she did not want to consider relocating for a suitable role but wished to remain in Gladstone.

[26] It was stated by Mr Rohloff that Ms Mossman also took the position description for the new role of Fleet Controller to consider.

[27] On 19 May 2016, Mr Jim O’Donnell, Ms Penny Washington, the HR advisor, and Mr Rohloff met with Ms Mossman to discuss redeployment options. At that time, it was claimed that Ms Mossman indicated that she did not understand why she had to apply for the position for reasons that she believed it to be “her position”, or her former position. It was explained to Ms Mossman that the position was not her old position but was an amalgamated, new position and that there were two administration officers in the Gladstone office but only one remaining role - thus a selection process (involving both herself and Ms Cross) was necessary and fair.

[28] On the morning of 20 May 2016, Ms Mossman spoke with Ms Washington around 8 AM and indicated to her that she would not be applying for the administrator position. Ms Washington indicated that if she did not apply for the position, then the position would default to Ms Cross as a consequence. Ms Washington stated that Ms Mossman indicated that she understood the implications of her decision.

[29] Later in the day on 20 May 2016, Ms Mossman further indicated whilst in a meeting with Mr Jim O’Donnell, Ms Penny Washington, and Mr Rohloff, that she declined to make an application and sought a redundancy payment. The notes retained on a contemporaneous basis by Ms Washington attest to Ms O’Donnell’s comments in this regard. Ms Mossman was said to have again raised her concern as to why she was put in a situation in which she was required to apply for her former position. Ms Mossman was again informed that the position was a different position to the one she had previously performed and that it was necessary to provide both herself and Ms Cross with a fair appointment process.

[30] Ms Washington subsequently prepared correspondence dated 20 May 2016 confirming Ms Mossman’s advice to her employer that she did not wish to apply for the administrator role but instead wished to proceed to receive a redundancy payment.

Consideration of section 389

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

[31] Ms Mossman accepted, on the basis of her experiential knowledge, that there was a downturn in the industry that caused the employer to reduce its staff numbers.

[32] The evidence of the employer therefore was not challenged. It held that the changing market in the post construction period and the loss of a key contract meant that it had to address its organisational structure, align its resources with the demand for its services and utilise its available skills more efficiently. The evidence set out above attests to this strategy being given operational effect, in the circumstances affecting the Gladstone region.

[33] One of the consequences of this approach, amongst others, was that the employer no longer required three administrative positions but only required one administrative position, which was to some extent an amalgam of various of the duties derived from the other (two) positions (with other components of the positions being performed by employees outside of Gladstone).

The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

[34] The work performed by Ms Mossman was covered by the Clerks – Private Sector Award 2010 (“the Award”).

[35] Clause 8.1 of the Award sets out the consultation term the employer was obliged to apply in the circumstances.

[36] Clause 8.1 of the Award provides as follows:

8. Consultation regarding major workplace change

8.1 Employer to notify

(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b) Significant effects include termination of employment, major changes in composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

8.2 Employer to discuss change

(a) The employer must discuss with the employees affected and their representative, if any, the introduction of the changes referred to in clause 8.1, effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1.

(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

[37] On the evidence set out before me, the employer met with the employees who were likely to be affected by the operational changes proposed on 10 May 2016 and the 11 May 2016. At the meeting of 10 May 2016, the employer set out the nature of the organisational review and explained the reasons why the operational changes were under consideration. It is probable that this meeting principally involved supervisory staff, with a small number of administrative staff. The content of that meeting and the documentation there distributed, was subsequently put to the wider affected class of employees the following day, on 11 May 2016.

[38] As I mentioned earlier, there is some point of difference between the parties in this regard. The employer’s witnesses contended that Ms Mossman was in attendance at the meeting of 10 May 2016, whilst Ms Cronin suggested that Ms Mossman had been absent from the 10 May meeting and had instead attended the debriefing (given by her) on 11 May 2016. On either account, Ms Mossman had the proposal explained to her, received the applicable written documents (as filed in evidence) and was provided opportunities then and thereafter to raise issues and ask questions.

[39] Ms Mossman herself was also the subject of a meeting on 18 May 2016, in the terms I have set out above through the evidence of Mr Rohloff and Ms Washington. The employer further informed Ms Mossman about the changed organisational structure of the business and discussed her options in relation to redeployment and further employment, as the case may have been.

[40] Further meetings were conducted with Ms Mossman on 19 May 2016 on the following day, 20 May 2016. On both these occasions the employer sought to elicit Ms Mossman’s position in relation to the redeployment process.

[41] The evidence led in this matter sufficiently discharges the employer’s obligation to give effect to its consultation obligations under clause 8.1 of the Award.

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

[42] I have set out above, at some length, the evidence of the employer in relation to the redeployment process.

[43] Ms Mossman insisted the new, consolidated position was the same as her position, and therefore her job had not been made redundant. She expressed considerable anxiety that she was required to apply for (what she deemed to be) her own position, let alone compete for the position with another employee, Ms Cross.

[44] But the new, consolidated position was not the same position as Ms Mossman had held prior to the redundancy.

[45] Ms Mossman, I think, recognised the suite of human resource duties set out in the new position, consolidated position were not duties she had previously performed, and the desirable qualifications had been modified to accommodate these required duties. These duties had been consolidated from Ms Cross’ prior position. The duties I add were not superficial activities but genuine duties relating to conventional HR responsibilities (such as coordinating probationary review processes; coordinating new starter processes; and “on boarding” of “all Gladstone personnel including medicals, white cards, site inductions and gathering any other relevant employee data”).

[46] The reporting line had also changed as a consequence of the organisational restructure, which introduced a new dimension into the consolidated position compared to Ms Mossman’s prior position.

[47] Ms Cross, I add, gave evidence which was unchallenged that she also, had previously performed a large range of the administrative duties now under the new, consolidated administrative position, in addition to the HR duties cited above.

[48] The circumstances facing the employer, therefore, were such that it was not reasonable for the employer to redeploy Ms Mossman directly to the newly created administration position. This was because there was another employee, Ms Cross, whose administration position was also made redundant at the same time, was also qualified to perform the new role. Because of this circumstance, the employer reasonably applied a selection process to the available administration position, and invited each administration employee whose position had been made redundant (Ms Cross and Ms Mossman), to apply for the available position.

[49] Ms Mossman, on the available evidence, initially indicated that she intended to apply for the new, vacant administration position. She subsequently appears to have changed her mind in this regard and pressed her employer to directly redeploy her to the position. Ultimately, Ms Mossman did not seek to apply for the new, vacant administration position and on the evidence at hand, but sought instead to access a voluntary redundancy benefit. She seemingly did so because she objected to applying for what she argued was her “old” job (as I have explained earlier).

[50] In circumstances in which an employer seeks to reduce the number of employees and to reassign a range of duties to be performed by its workforce, it is not uncommon for an employer to require its relevant employees to undertake a selection process to fill the suite of remaining or newly created, residual positions. In essence, where there are more qualified employees than there are available positions following an organisational change, an employer (with the available resources) may apply a transparent, merit based selection process to fill the available positions (though it is not obligated to do so for purposes of s. 389 of the Act).

[51] The Full Bench in Ulan Coal Mines Limited v A. Honeysett[2010] FWAFB 7578 has made (obiter) comment in relation to a requirement for an employee whose position was declared redundant having to apply for a vacant position along with other employees, rather than being directly placed in that position. The Full Bench commented:

“[34] It may be appropriate to make some concluding remarks about the operation of s.389(2). It is an essential part of the concept of redeployment under s.389(2)(a) that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard. The outcome of that application would depend upon a number of other considerations.”

[52] In accordance with item 1552 of the Explanatory Memorandum and s.382(2) of the Act, the Full Bench indicates that it is only where it is reasonable to redeploy the employee to the available position that an employee is placed in the vacant position. The reasonableness of an employer’s actions in redeploying or not redeploying an employee will always be a finding of fact in the circumstances; there may be many matters relevant to the reasonableness of a cause of action in this regard.

[53] Further, the predicament envisaged by the Full Bench appears to concern a hypothetical employee for whom it was reasonable for the employer to place in a vacant position (having possessed all the relevant skills and aptitudes etc) but who is required by the employer to compete in an open market with external candidates, or internal employees whose positions have not been made redundant.

[54] Demonstrably, this is a distinguishable circumstance to that currently before me, in respect of Ms Mossman and Ms Cross. In my view, there is no error on the part of the employer here in requiring Ms Mossman to apply for the new, consolidated position.

Conclusion

[55] For the reasons I have given above, the employer has discharged its obligations under section 389 of the Act in all respects. As a consequence, the employer has a defence against the substantive application as made under section 394 of the Act. Because of my conclusion in this regard, the application made by Ms Mossman under section 394 of the Act must be dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Ms Mossman for herself.

Ms Smith, solicitor of Norton Rose Fulbright for the respondent.

Hearing details:

By telephone

30 August 2016

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