Ms Susan Hennessy v Break Thru People Solutions
[2012] FWA 7887
•14 SEPTEMBER 2012
[2012] FWA 7887 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Susan Hennessy
v
Break Thru People Solutions
(U2012/8782)
COMMISSIONER CARGILL | SYDNEY, 14 SEPTEMBER 2012 |
Termination of employment - Jurisdiction (genuine redundancy).
[1] This decision relates to an application for an unfair dismissal remedy made by Ms S. Hennessy (the applicant) arising from the termination of her employment by Break Thru People Solutions (the respondent). The application is made under section 394 of the Fair Work Act 2009 (the Act) and was lodged on 6 June 2012.
[2] The matter was heard in Sydney on 4 September 2012. The applicant was represented by Ms Sutherland, Industrial Officer from the Australian Municipal, Administrative, Clerical and Services Union (ASU). The respondent was represented by Ms Carter, solicitor, who appeared with permission.
[3] The respondent has raised a jurisdictional objection to the application. It submits that the applicant’s dismissal was a genuine redundancy. The matter was listed for hearing of the jurisdictional objection and the arbitration of the substantive claim. Due to a misunderstanding, both parties were of the view that it was the jurisdictional issue only which was programmed for 4 September. Consequently it was agreed that this issue should be dealt with first. Depending upon the outcome, the matter may or may not need to be listed for hearing and determination of the question of whether the dismissal was unfair.
[4] In the hearing on 4 September the applicant gave sworn evidence and her witness statement was marked as Exhibit Applicant 1. Her oral testimony is at PN 64-216 of Transcript.
[5] Five witnesses gave evidence in the respondent’s case:
Ms A Le Lay Executive Manager - Human Resources and Corporate Services of the respondent. Her witness statement was marked as Exhibit Respondent 1 and her oral testimony is at PN 230-234 of Transcript. Ms Le Lay was not cross-examined;
Mr R Lewis Managing Director of the respondent. His witness statement was marked as Exhibit Respondent 2 and his oral testimony is at PN 238-256 of Transcript;
Ms P Maskell General Manager - Community Services of the respondent. Her witness statement was marked as Exhibit Respondent 3 and her oral testimony is at PN 259-354 of Transcript;
Ms D Ballantine Chief Operating Officer of the respondent. Her witness statement was marked as Exhibit Respondent 4 and her oral testimony is at PN 357-413 of Transcript;
Ms C Down Program Manager with the respondent. Her witness statement was marked as Exhibit Respondent 5 and her oral testimony is at PN 416-437 of Transcript.
FACTS AND EVIDENCE
[6] The respondent is a not for profit organisation which provides a range of employment seeking, community and training services in Victoria, New South Wales and Queensland. Its clients include the long term unemployed, indigenous Australians, people with a disability and people from linguistically and culturally diverse communities.
[7] The applicant commenced employment with a predecessor of the respondent in September 2005. At that time she was employed as General Manager of Dunrossil, an organisation which provides support services for people with an intellectual disability in the Cumberland/Prospect area of Sydney. Following the merger of that organisation with the respondent in October 2010, the applicant became the Business Manager at Dunrossil. She continued to occupy that position until her dismissal. Dunrossil continued to operate as a division of the respondent.
[8] It is the applicant’s evidence that she had not been consulted about the change to her position at the time of the merger. It is also her evidence that, both prior to and following the merger, she raised strong objections to the respondent’s stance in relation to the award coverage of the Dunrossil staff including herself. The applicant says that because of her continued agitation about this issue she became a target of the respondent’s executives. Ms Ballantine categorically denied that the applicant’s dismissal was due to her attitude towards issue of award coverage.
[9] It should be noted that the applicant and the ASU contend that the award which covered the applicant’s employment is the Social Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award). The respondent contends that the relevant award is the Labour Market Assistance Industry Award 2010 (LMAI Award). This difference between the parties underlies a further contest between them as to the appropriate redundancy payments which were due to the applicant. That of course is not an issue which is before me.
[10] The evidence of Ms Le Lay, Ms Maskell and Mr Ross is that significant losses were suffered in a number of the respondent’s business units during the financial year ending June 2012. As a result the respondent implemented several cost cutting measures including a recruitment freeze across New South Wales from January 2012.
[11] The financial difficulties in the respondent’s organisation included a loss at Dunrossil for the period up to 31 March 2012 of $129,415, excluding its share of management services. The relevant profit and loss report is Attachment A to Exhibit Respondent 3. In April 2012 the Senior Executive Group directed Ms Maskell to review the operations of Dunrossil to ascertain whether changes or a restructure could be made to ensure that the project remained viable.
[12] Ms Maskell prepared a Business Case, Attachment B to Exhibit Respondent 3. She recommended that the position of Business Manager be made redundant and the areas of responsibility of that role be redistributed to other managers and teams within the organisation. Ms Maskell presented the Business Case to the Senior Executive Group on or around 15 May 2012. It is the evidence of Mr Lewis that, on or around 18 May, this Group decided to consult with the applicant regarding the possible redundancy of her position. This task was delegated to Ms Ballantine and Ms Maskell.
[13] Ms Maskell was requested to organise a meeting with the applicant as soon as possible. The applicant and Ms Maskell had a previously arranged meeting for the following Monday, 21 May. After discussion with Ms Ballantine, Ms Maskell changed the purpose of the meeting. She emailed the applicant to inform her that Ms Ballantine would be attending. It is Ms Maskell’s evidence that she did not advise the applicant that the meeting involved possible redundancy as she wished to inform her face to face due to the potentially upsetting and emotional nature of the issue. She proposed to have a further meeting for additional discussion a few days later.
[14] The meeting between the applicant, Ms Maskell and Ms Ballantine took place on 21 May 2012. Ms Maskell spoke about the financial situation at Dunrossil, the review of the structure and the possibility that the applicant’s position could be made redundant. The applicant was not provided with the profit and loss report or the Business Case. Ms Maskell’s evidence is that the applicant already had access to the profit and loss statements as part of her role. Ms Ballantine’s evidence is that the Business Case was confidential as it included material about other business units.
[15] There was some discussion about the applicant looking for other jobs within the organisation. Ms Maskell’s evidence is that she informed the applicant that, because of the recruitment freeze, there were no redeployment options in New South Wales. The applicant’s evidence is that she was not told of this although she was aware that there was a freeze on the recruitment of support staff.
[16] It is the evidence of Ms Maskell and Ms Ballantine that the applicant was informed that the meeting was part of the consultation process and that no final decision had been made about her future. The applicant was asked to consider and suggest options which might ameliorate the impact of a redundancy on her. It was suggested that it would be less distracting for her to work from home while she considered this. A follow-up meeting was arranged for 24 May.
[17] It is the applicant’s evidence that she could not understand why her position was selected to be made redundant rather than another position such as a Program Manager. She states that she did not receive a proper explanation as to the reason for her selection. The applicant also questions how such a high-level position could be cut when management is vital to Dunrossil’s operation. The applicant noted that she had been given no opportunity to comment or advance alternative suggestions on other ways of addressing the financial difficulties. It is the applicant’s evidence that if she had been aware of the purpose of the meeting on 21 May she would have contacted the ASU.
[18] The applicant’s evidence is that, in her view, the respondent had already decided to terminate her employment. She says that this is borne out by the redundancy template and long service leave calculations given to her at the 21 May meeting both of which showed 23 May 2012 as the end date of her employment. These documents are respectively Attachments E and F to Exhibit Applicant 1. It is Ms Maskell’s evidence that these documents were indicative payment sheets only.
[19] It is the applicant’s evidence that she believed that she had been directed not to return to the workplace and consequently thought she had done something wrong. Ms Maskell’s evidence is that it was not a direction to the applicant but merely an offer to work from home for a few days.
[20] On 23 May the ASU wrote to the respondent raising concerns about the consultation procedure, the award coverage issue as it would impact on any redundancy payment as well as the failure to provide particulars of the way in which the payment had been calculated. It also noted that, because of the applicant’s age, she was entitled to an extra week’s notice. This correspondence is Attachment G to Exhibit Applicant 1. Ms Maskell’s evidence is that the notice was immediately rectified. The respondent replied to the ASU in a letter dated 24 May 2012, Attachment H to Exhibit Applicant 1.
[21] The meeting on 24 May was attended in person by the applicant, Ms Maskell and Ms Ballantine. Ms Sutherland attended by way of a telephone link. The applicant advanced two suggestions: that she relocate to Cairns for up to three months to help start up a new program which was to commence on 1 July, or, that she could provide consultancy services to the respondent which could then be sold on to other similar organisations.
[22] There was a break in the meeting. The evidence of Ms Maskell and Ms Ballantine is that they considered each of the applicant’s suggestions but that neither was viable. They returned to the meeting and Ms Ballantine informed the applicant of this. She explained that the Cairns project already had senior managers and the only roles available there were client serving positions. Further, the project needed permanent staff whereas the applicant was available for three months only. She also explained that consulting services did not come within the respondent’s core set of services and strategic plan.
[23] Ms Ballantine informed the applicant that her position was to be made redundant as from that date. There was discussion about a farewell function for the applicant and her immediate transport difficulties. Ms Ballantine agreed that the applicant could retain the respondent’s car for a few days.
[24] It is Ms Le Lay’s evidence that 26 positions were made redundant from the respondent’s New South Wales operation late in the financial year ending 30 June 2012. This included that of the applicant. Some of the redundancies took place before the applicant’s dismissal and others after that date. Ms Le Lay’s evidence is that, in the period February to June 2012, over 50 jobs were lost due to the redundancies, natural attrition and the recruitment freeze. It is Ms Ballantine’s evidence that Ms Le Lay had notified the ASU about the change process.
[25] It is also Ms Le Lay’s evidence that the respondent has attempted to maintain front line services to clients and consequently many of the redundancies involved removing levels of management. Mr Lewis’s evidence is that the Senior Executive Group regretted the need to make positions redundant and had undertaken other cost cutting measures first. There was ultimately no alternative to the redundancies.
SUBMISSIONS ON BEHALF OF THE APPLICANT
[26] A written outline of submissions on behalf of the applicant and submissions in reply were lodged prior to the hearing. The first document contains submissions in relation to both the genuine redundancy question and the issue of whether the dismissal was unfair. For the purposes of this decision I have considered the material on the first point only. Ms Sutherland also made oral submissions.
[27] In the written submissions the applicant contends that the job she performed still exists. She further contends that the respondent deliberately restructured its operations so as to deprive her of her position when there were other options available to it. Consequently the test in section 389(1)(a) of the Act has not been met by the respondent.
[28] In both the written and oral submissions on behalf of the applicant it is argued that the respondent had also failed to meet the test in section 389(1)(b) in that it had not complied with its consultation obligations under the modern award. Reference is made to the decision of Suridge v Boral Window Systems Pty Ltd T/A Dowell Windows[2012] FWA 3126 (Suridge). It is noted that the consultation requirements are identical in both the SCHADS and LMIA Awards.
[29] It is submitted that the respondent had not consulted with the applicant as early as practicable after the decision had been made to make the changes in the structure at Dunrossil. In particular, the email of 18 May had not informed the applicant of this decision or the fact that the purpose of the meeting of 21 May had been changed. This deprived the applicant of the opportunity to bring a support person with her to that meeting.
[30] An additional fault in the process lay in the respondent’s failure to provide the applicant with information in writing to explain the reason for the redundancy. Neither the applicant nor the ASU were given, shown or taken through a copy of the Business Case. It is submitted that merely talking about the Business Case was not sufficient to discharge the respondent’s consultation obligations.
[31] Further, the respondent did not discuss or put in place measures to avert or mitigate the adverse effects of the redundancy on the applicant. In particular, the respondent required the applicant to put forward suggestions of this kind rather than advancing any of its own.
[32] It is also submitted that it would have been reasonable for the applicant to have been redeployed within the organisation. This is especially so in view of her skills, experience, knowledge of the organisation, employment history and the size of the respondent. In this regard reference is made to the decision of Ulan Coal Mines Limited v Honeysett and others[2010] FWAFB 7578 (Honeysett).
[33] In her oral submissions Ms Sutherland contended that the respondent had made the decision to dismiss the applicant prior to undertaking any discussions with her. It had taken a punitive approach aimed at fast tracking the applicant’s departure from the organisation. This included a refusal to allow the applicant to work out some of her notice period. Ms Sutherland submitted that the applicant’s dismissal was based upon her agitation of the award coverage issue.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
[34] Written submissions were lodged prior to the hearing. Ms Carter also made oral submissions.
[35] The respondent submitted that it had met both of the tests set out in section 389(1). The applicant’s job is no longer required and is not being performed by anyone in the organisation. Her former functions, duties and responsibilities have been distributed among other employees. The respondent submitted that just because the functions etc of a job still exist does not mean that a redundancy is not genuine: Ulan Coal Mines Ltd v Howarth & others [2010] FWAFB 3488 and the Explanatory Memorandum of the Fair Work Bill 2008 @ paragraph 1548 (Explanatory Memorandum).
[36] The respondent submitted that, regardless of the issue of award coverage, it had complied with all of its consultation obligations. It submitted that it consulted with the applicant as soon as possible after a definite decision had been made to restructure. There was further consultation with the applicant and the ASU as well as correspondence between the union and the respondent.
[37] It is submitted that the applicant was not provided with a copy of the Business Case as it contents were considered to be confidential.
[38] The respondent strenuously denied the proposition that it had not consulted properly. Ms Carter noted that the relevant consultation clause in Suridge was different to that which is in the two awards in this matter. She submitted that the clause in that case required consultation prior to a definite decision being made. Ms Carter submitted that the respondent went beyond what had been found to be appropriate consultation in White v Kabi Organic Golf Course[2011] FWA 8348 and Lindsay v Department of Finance and Deregulation [2011] FWA 4078.
[39] It is submitted that it would not have been reasonable to have redeployed the applicant to another position within the organisation. The only positions which were available were junior roles in Cairns. In the circumstances the respondent was not able to put forward anything substantive by way of redeployment options however it had seriously considered the applicant’s suggestions. Ms Carter noted that the respondent had accommodated the applicant in relation to the car and the morning tea. Ms Carter further noted that there was no evidence that the applicant had sought to work out part of her notice.
[40] The respondent submitted that the question of the fairness of the applicant’s selection for redundancy was not relevant to the present issue. In this regard it referred to paragraph 1553 of the Explanatory Memorandum and to the decisions in McAlister v Bracken Limited [2010] FWA 203 and UES (Int’l) Pty Ltd v Harvey[2012] FWAFB 5241.
CONCLUSIONS
[41] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits of a claim are considered. The fourth of such matters is whether the dismissal was a case of genuine redundancy. The terms of section 385 are also relevant in that, in order to make a finding that a person has been unfairly dismissed, Fair Work Australia (FWA) must be satisfied, among other things, that the dismissal was not a genuine redundancy.
[42] Section 389 sets out the meaning of genuine redundancy. It provides as follows:
“(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.”
[43] I am satisfied on the basis of the evidence in this case that the respondent no longer required the applicant’s job to be performed by anyone because of changes in the operational requirements of the enterprise.
[44] I accept the evidence of the respondent’s witnesses as to the financial losses which had taken place in its operation and the need to address those losses. The fact that the respondent took other steps such as implementing a recruitment freeze prior to initiating any redundancies is also relevant. The applicant says that the respondent could have chosen options other than making her job redundant. That may well be the case but is not relevant to the question which I have to determine.
[45] I accept the evidence of Ms Maskell that the applicant’s responsibilities have been redistributed among other managers and other teams and that the applicant’s job is no longer required. It is clear that the relevant test is not whether any duties survive a restructure but rather it is whether the job still exists. I am satisfied that the applicant’s job does not exist and that section 389(1)(a) has been made out.
[46] The next consideration is whether the respondent complied with its obligations to consult about the redundancy. As indicated earlier there is a dispute between the parties as to which award applied to the applicant’s employment. In the circumstances I do not need to determine that issue. Clause 8 of both the SCHADS and LMAI Awards is in the same terms and reads as follows:
“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 the 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 representatives, if any, the introduction of the changes referred to in clause 8.1, the 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.”
[47] The respondent held discussions with the applicant in two meetings, one of which was attended by Ms Sutherland on a telephone link. The change and its likely effect on the applicant were discussed. It is true that there was not much advanced by the respondent by way of measures to avert or mitigate the adverse effects of the change on the applicant, however in the circumstances of her senior role and the recruitment freeze there was very little that could have been put. The respondent gave prompt consideration to the matters raised by the applicant.
[48] I am satisfied that the discussions commenced as early as practicable after the Senior Executive Group made its decision to introduce the change. The evidence is that the decision was made on Friday 18 May. The first discussion with the applicant took place on Monday 21 May. Ms Maskell’s evidence is that this was the first occasion on which both the applicant and Ms Ballantine were available. I accept that the applicant could have been informed of the decision on 18 May however Ms Maskell’s wish to tell the applicant face to face is not unreasonable.
[49] I accept that the Business Case contained confidential information the disclosure of which would have been contrary to the respondent’s interest. It was not required to provide this material to the applicant and the ASU.
[50] Section 389(1)(b) has been met. The final issue is whether it would have been reasonable in all of the circumstances for the applicant to have been redeployed within the respondent’s organisation. I note that there is no evidence of the existence of any associated entities.
[51] The Full Bench in the Honeysett decision referred to earlier considered section 389(2) and said:
“[28] The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.”
[52] The evidence in this case is that at the time of the applicant’s dismissal and for some months previously there had been a recruitment freeze on positions in New South Wales. The only positions which were available were comparatively junior roles in Cairns. Although the applicant expressed some interest in Cairns, it was in relation to managerial positions for a maximum of three months. The evidence is that the provision of consultancy services by the applicant, or presumably anyone else, does not fit within the respondent’s core services.
[53] I am satisfied that in the circumstances it would not have been reasonable to have redeployed the applicant.
[54] As a consequence of my findings on each of the relevant factors in section 389 it follows that the applicant’s dismissal was a case of genuine redundancy.
[55] The application is dismissed. An order to that effect is issued with this decision.
COMMISSIONER
Appearances:
Ms L Sutherland of the Australian Municipal, Administrative, Clerical and Services Union for the applicant
Ms H Carter, solicitor for the respondent
Date of hearing:
2012.
Sydney.
September 4.
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