Ms Yik Tung (Christy) Tsui v Altara Group Pty Ltd
[2023] FWC 1443
•25 JULY 2023
| [2023] FWC 1443 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Yik Tung (Christy) Tsui
v
Altara Group Pty Ltd
(U2023/2205)
| COMMISSIONER JOHNS | MELBOURNE, 25 JULY 2023 |
Application for an unfair dismissal remedy – whether dismissal was a case of genuine redundancy – application dismissed
Introduction
On 16 March 2023, Ms Yik Tung (Christy) Tsui (Applicant), made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (Cth) (FW Act) for an order granting a remedy, alleging that she has been unfairly dismissed from her employment with Altara Group Pty Ltd (Respondent).
On 30 March 2023, the Respondent filed its response to the application. It raised a jurisdictional objection contenting that the dismissal was a case of genuine redundancy.
Attempts to conciliate the matter were unsuccessful. Accordingly, on 28 April 2023 I issued Directions and scheduled the matter for a determinative conference.
The proceedings
The determinative conference was conducted by Video using Microsoft Teams on 20 June 2023.
In advance of the determinative conference the parties filed materials which were compiled in a Digital Tribunal Book (DTB). For completeness I set out below the documents relied upon by the parties. I have had regard to all these materials in coming to this decision:
| Exhibit | Document title | Document date |
| 1 | Form F2 | 16-03-2023 |
| 2 | Form F3 | 30-03-2023 |
| 3 | The Respondent's material | 10-05-2023 |
| 3.1 | Outline of arguments: objections | 10-05-2023 |
| 3.1.1 | • Attachment 1- Position Description General Manager Finance | Undated |
| 3.1.2 | • Attachment 2 - Position Description Senior Management Accountant | Undated |
| 3.2 | Statement of evidence | 10-05-2023 |
| 3.3 | Outline of arguments: Merits | 10-05-2023 |
| 4 | The Applicant's material | 26-05-2023 |
| 4.1 | Outline of arguments: objections | 26-05-2023 |
| 4.2 | Statement of evidence | 26-05-2023 |
| 4.3 | Outline of arguments: merits | 26-05-2023 |
| 4.4 | Letter of Redundancy | 27-02-2023 |
| 4.5 | Letter of Service | 27-02-2023 |
| 4.6 | Payslip | 31-12-2022 |
| 4.7 | Employment Contract | 05-07-2022 |
| 5 | The Respondent's reply material | 05-06-2023 |
| 5.1 | Reply submissions | 05-06-2023 |
| 6 | The Applicant’s CV | Undated |
| 7 | The CV of the successful candidate | Undated |
During the determinative conference, I requested that the Respondent produce the CVs of each of the Applicant and the person who was successful in attaining the new position of General Manager of Finance. Accordingly, these materials were added as exhibits 6 and 7 respectively.[1]
During the determinative conference, additional oral evidence was provided by the Applicant and the Respondent’s Chief Executive Officer, Mr Clive Callaway. I have had regard to all of the evidence in coming to this decision.
Factual findings
The following matters were either agreed between the parties or not substantially contested. Consequently, I make the following findings of fact based on the evidence:
a)Up until mid-2022 the Respondent employed as part of its senior management structure the position of General Manager of Finance (GM Finance).[2]
b)The GM Finance resigned in around May 2022.[3]
c)After the resignation the Respondent undertook a review of its operational requirements. It decided to downgrade the GM Finance position to that of a Senior Management Accountant. The Respondent made the decision for the following reasons:[4]
“The economic uncertainty related to the Covid 19 pandemic and its ongoing impacts on the aviation sector and hospitality sector, at that time the two industries that the Respondent provided the vast majority of labor hire services to. The Respondent’s largest client is the Qantas Group.
After an extensive review of the labour market, the Respondent determined that it was unlikely to secure the services of a suitably qualified and experienced General Manager of Finance, hence the decision to downgrade the role to that of a Senior Management Accountant was made.
Cost control and the potential for a continuing reduction in revenue lead to the decision that the organisation would not be able to sustain or require the experience level that the role of a General Manager of finance delivered.”
d)The Respondent advertised the role of Senior Management Accountant. The Applicant was successful in winning the role.
e)At or around the time that the Applicant was interviewed for the Senior Management Accountant role, she was advised that one of the reasons why the role was created was because the Respondent had difficulties recruiting a GM Finance.[5]
f)The Applicant’s employment with the Respondent commenced on 11 July 2022.[6]
g)The Applicant was employed on a full-time basis working 38 hours per week.
h)The Applicant’s annual salary was $100,000.00 plus 10.5% superannuation.[7]
The Applicant’s visa status changed to a student visa on or around July 2022. This meant that, by June 2023 the Applicant was restricted in the hours she could work. She would not have been able to continue in full-time employment. This was unknown to the Respondent when it made the decision to make the Applicant’s position redundant.
j)By late 2022 the Respondent assessed that its fears relating to the worst impacts of COVID-19 had not materialised. Accordingly, the board of directors and the former CEO undertook a review of the business structure and determined to re-introduce the position of GM Finance. The decision was made because it was deemed necessary in line with the Respondent’s strategy of growth and expansion.[8]
k)In late January/early February 2023 a decision was made to make the Applicant’s position (Senior Management Accountant) redundant.[9]
l)In addition to recreating the position of GM Finance, the Respondent also decided to engage the services of an overseas labour agency in the Philippines. At least 2 of the people who work in the Finance Department are labour hire workers. The positions are pay-roll officer positions. They are not accounting positions.[10]
m)On 27 February 2023, the Applicant’s employment was terminated by reason of her position having been made redundant.
n)The Applicant was not consulted about the restructure.[11]
o)At the meeting on 27 February 2023 the Applicant asked about the possibility of redeployment.[12] She was told there was none. It was only at this time that the Applicant made known her change in visa status and the impact that it would have on her inability to undertake full-time work. The Applicant expressed an interest in part-time work.[13]
p)The letter of redundancy dated 27 February 2023, provided the Applicant with two weeks’ pay in lieu of notice and a letter of service that positively attested to her abilities.[14] No severance pay was paid. This is because the Applicant had been employed for less than 12 months.
q)The Respondent then commenced a recruitment process for the reinstated GM Finance position utilising the services of an external executive search firm.[15]
r)Four candidates were short-listed from which a selection and appointment was made (New GM Finance).[16]
s)The remuneration of the New GM Finance is significantly higher than that of the Applicant.[17]
t)The Applicant has never held a position of GM Finance. She has held a financial controller position.[18]
u)The New GM Finance has significantly more years of experience and more senior experience than the Applicant. The Applicant conceded this before me.[19]
As at the date of this decision, the Applicant would be unable to perform full-time work because of her visa status.[20]
Protection from Unfair Dismissal
An order for reinstatement or compensation may only be issued where the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of the dismissal. In the present matter this is not an issue in dispute in the proceeding, the Respondent concedes the same.
Consequently, the Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal.
I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the FW Act.
Was the dismissal unfair?
A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s.385 of the FW Act existed. Section 385 provides the following:
“385 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.”
Was the applicant dismissed?
A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the FW Act. Section 386 of the FW Act contains the relevant definition. In the present matter, this is not an issue in dispute in the proceedings, the Respondent concedes the same.
Consequently, the Commission, as presently constituted, finds that the Applicant was dismissed from her employment with the Respondent within the meaning of s.386 of the FW Act.
Was the dismissal consistent with the Small Business Fair Dismissal Code?
The Respondent has 1,000 or more employees across all its entities, accordingly the Small Business Fair Dismissal Code is not a relevant consideration in this matter.
Was the dismissal a case of genuine redundancy?
The Respondent submits the Commission should dismiss the application because the dismissal was a case of genuine redundancy. Section 389 of the FW Act defines the meaning of genuine redundancy:
“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.”
Essentially, there are three relevant questions that I must answer. I deal with each of them below.
Did the Respondent no longer require the Applicant’s job to be performed by anyone because of changes to its operational requirements?
The parties agreed that I must focus on the position of Senior Management Accountant.[21] Therefore, the Commission must be satisfied that the role of Senior Management Accountant was no longer required to be performed by anyone because of operational changes to the Respondent for it to be considered a case of genuine redundancy.
The Applicant did not concede that the Senior Management Accountant role disappeared.[22]
The FW Act does not define the term “operational requirements”. It is a broad term that permits consideration of many matters including the state of the market in which the business operates and the application of good management to the business.[23] Some examples of changes in operational requirements include a downturn in trade that reduces the number of employees required and the employer restructuring the business to improve efficiency including the redistribution of tasks done by a particular person between several other employees thus resulting in the person’s job no longer existing.[24]
The onus is on the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements.[25]
The Respondent contended that the two roles significantly differ because the GM Finance role requires skills in business system implementation, mergers and acquisitions, and regulatory compliance across its multiple different entities which were not commensurate to the Applicant’s career history and expertise.[26] Accordingly, she was not offered the role.
The Applicant contended that her role did not disappear but rather the newly created role assumed the majority of her existing responsibilities, and that the remaining was shifted to other employees.[27]
The Applicant further contended that in the Respondent’s official job description document for the position of GM Finance, mergers and acquisition was not included and merely added to their evidence to strengthen its position.[28] Mr Callaway in his oral evidence before me and under cross examination by the Applicant responded as follows:[29]
“…So the position description was written at a time when the – (indistinct) transitioning from the senior management accountant role to the general manager of finance, and the business has moved on considerably since that time. So during the interview process for the general manager of finance we certainly asked those questions of all candidates that had applied for the role, and the intent of Altara is to expand our organisation via growth, either organic or by mergers and acquisitions, not only in our own state and country but also we're looking at opportunities overseas in the Pacific region. So those – the points around the mergers and acquisitions were certainly discussed with all candidates, and that actually factored into our decision-making in the final application to appoint the now current general manager of finance, because she had had some experience with working overseas and also working across multi jurisdictions, and previously in some mergers and acquisitions of smaller organisations…
…So I think I'd take it back to the position that the company has moved in over the last probably eight to – or six to eight months, we do require a different skillset, and hence the role that we recruited for was a general manager of finance, we pay considerably higher than the previous role, and those skillsets that I've identified in the witness statement is certainly something that the organisation needs to help us grow and diversify our business. So I do accept it's not written in the position description around mergers and acquisitions, but the skillset was certainly discussed in all of the interviews we had with the candidates, and it's probably safe to say 70 per cent of those candidates had the ability to engage in that sort of work that we needed.”
I have made factual findings above about the creation of the Applicant’s position of Senior Management Accountant, the decision to make that position redundant and the decision to reinstate the GM Finance role.
The Respondent tendered position descriptions for the GM Finance role[30] and the Senior Management Accountant role.[31] I have given careful consideration of the differences and similarities between each role. Having done so, it is obvious that some of the duties:
a) remain the same;
b) are new; and
c) have been removed.
Before me Mr Callaway explained the differences.[32] I accept his evidence about the scope and genuine differences between the two positions. I accept that the new duties are higher in responsibility. I accept that the duties that have been removed have been distributed between other roles within the Respondent.
The fact that some of the Applicant’s former duties continue to need to be performed by someone (including some of them by the GM Finance) does not mean that the position of Senior Management Accountant continued to exist. It did not. It is clear from the evidence that the position of Senior Management Accountant, as a discrete role comprising a set of roles and responsibilities, ceased to exist in that form on and from 27 February 2023.
For these reasons I am satisfied that the Respondent no longer required the Applicant’s job of Senior Management Accountant to be performed by anyone because of changes to its operational requirements.
Was the Respondent required to comply with any obligations in a modern award or enterprise agreement?
The Parties both conceded that no consultation obligation applied in the circumstances as the Applicant was not covered by a modern award or an enterprise agreement.[33] Therefore, this is a neutral consideration.
Was it reasonable in all the circumstances to redeploy the Applicant?
The Commission must also be satisfied that it would not have been reasonable in all the circumstances to redeploy the Applicant.
The Respondent contended that during the meeting with the Applicant, it was conveyed to her that all efforts were exhausted, but no alternative role was identified even within a part-time capacity.[34] The Respondent explained that this was because of the small size of the finance department which consists of six (6) employees with three (3) working part time and two (2) under an overseas outsource arrangement.[35]
The Respondent contended that whilst it has 1,000 employees, about 85% of its force is employed on a casual basis to work with partnering clients under labour hire arrangements.[36] Accordingly, the Respondent contended that redeployment was not feasible nor commercially sustainable.[37]
The Applicant in turn contended that the Respondent’s use of outsourcing limited its redeployment options to her detriment.[38] The Applicant contended that the Respondent sought assistance from a labour agency in Philippines to fill the position of a payroll specialist and provide supplementary support to the finance team in or around December 2022 and mid-February 2023 respectively.[39] The Applicant further contended that the latter hire was two weeks prior to her dismissal which is indicative that there may have been capacity to engage her as a payroll specialist and that by not doing so, the Respondent opted to reduce its operational costs.[40]
The Respondent clarified in its reply submissions that the two position titles offered to outsourced employees were payroll officer and payroll specialist which were not commensurate to the higher skill level and pay grade of the Applicant’s role.[41] And that furthermore, the two individuals are not direct employees but rather employed by a separate agency.[42] Mr Callaway further submitted before me as follows:[43]
“So I guess the question – well what the applicant is asking is, look, if you knew my job was on the line, and you knew that there was this need for extra payroll support, notwithstanding the fact that it’s a significant demotion and would likely have been a big pay cut, why couldn’t you have offered me that?---I think, again, as you said, Commissioner, there was a drop down, so not a skill gap – obviously Ms Tsui would have had the ability to do a payroll-type function, but it would have been a big drop in pay, and there was a commercial decision to move some of those roles offshore as well.
But notwithstanding the drop in pay, some people will make a decision it’s better to be in a job than no job and they’ll take the pay cut. Why wasn’t she provided with that opportunity?---So when we sat down and discussed (indistinct) to the redundancy role, of her role, she elected to tell us at that meeting that her visa status had changed, which meant the visa status that she was moving back to would have been a restricted hours, and we believed that the roles that we needed were full-time roles that were required, not part-time roles. So we weren’t aware of that until the actual meeting on the day that we made Ms Tsui redundant.”
The Applicant confirmed before me that from 30 June 2023 onwards, her student visa restrictions will only allow her 48 hours of work per fortnight.[44] Therefore, the Respondent’s options to redeploy the Applicant were further limited. The Applicant contended before me that the Respondent was not aware of her visa status until the day of the redundancy, therefore, this is not a relevant consideration.[45] This submission is not of much assistance to the Applicant as it is the Respondent’s prerogative on what basis it wishes to employ the Applicant, and in the circumstances the Respondent only needed a full-time employee. The Applicant conceded before me that the Respondent holds that prerogative.[46] In light of the same, even if the Respondent had available a full-time role, the Applicant could not have lawfully accepted the role and work without restrictions beyond 30 June 2023.
I note the observations made by Deputy President Sams in Dominic Fitzjohn v Southern Cross Protections Pty Ltd[2015] FWC 2601:[47]
“[135] Unfortunately, the outsourcing of existing work and the resultant displacement of in house employees is a contemporary phenomenon in many modern workplaces. It is neither unusual or unreasonable, let alone unlawful, as claimed by the applicant. The fact the applicant utterly rejected the respondent’s decision does not alter the correct legal position.”
I accept that the Applicant, unlike the above case does not submit that the outsourcing is unlawful, but rather that its usage limited her deployment opportunities. Unfortunately, whilst the outsourcing likely limited the Applicant’s options, it does not provide a satisfactory answer to whether it was reasonable in all the circumstances to redeploy her.
A previous Full Bench decision of the Commission considered similar circumstances where an employer had outsourced the main functions of an employee’s role to an independent business in Philippines.[48] The initial decision found that the dismissal was a case of genuine redundancy. The Full Bench in refusing permission to appeal observed that:[49]
“[28] In determining whether a dismissal is a ‘genuine redundancy’ the Commission is concerned with whether the 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’. A decision by an employer to outsource all of an employee’s duties is clearly a redundancy.”
The Full Bench decision of the Commission in Ulan Coal Mines Limited v John Howarth and others[2010] FWAFB 3488 provides a further example:[50]
“[19] In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the “jobs” of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 non-trades mineworker positions which were surplus to the Company’s requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.
[20] These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.”
In the present matter I cannot identify any position into which, as at 27 February 2023, the Applicant could have been redeployed into for the following reasons.
The position of GM Finance was a higher position to that held by the Applicant. The Applicant has never been a GM Finance. The CV of the New GM Finance demonstrates that the Applicant would not have been competitive in that recruitment process. Before me the Applicant conceded that the New GM Finance has significantly more years of experience and more senior experience than she does.[51]
In relation to the payroll positions outsourced to the Philippines prior to the decision to make the Applicant’s position redundant, it is not for the Commission to stand in the shoes of an employer and dictate how it should organise its employment/contractor arrangements. The decision made by the Respondent is rational. It was not made to deprive the Applicant of opportunities when her position was made redundant. No doubt it limited available options for the Applicant, but that was the prerogative of the Respondent to structure its affairs in that way.
What that means is that, as at 27 February 2023, there were no positions into which the Applicant could be redeployed.
Consequently, I am not satisfied that it would have been reasonable in all the circumstances for the Applicant to be redeployed within:
a) the Respondent's enterprise; or
b) the enterprise of an associated entity of the Respondent.
Having made factual findings and then answered each of the three questions I have been required to answer I concluded that the Applicant’s dismissal was a case of genuine redundancy. Because the Applicant’s dismissal was a case of genuine redundancy the Commission cannot find that the dismissal was unfair.
Conclusion
The dismissal of the Applicant was a case of genuine redundancy in accordance with its meaning pursuant to s.389 of the FW Act. Accordingly, the jurisdictional objection is upheld and the application dismissed.
An order to this effect will be issued with this decision [PR763266].
COMMISSIONER
Appearances:
Ms Y. Tsui for herself
Mr C. Callaway and Mr B. Brown on behalf of the Respondent
Hearing details:
2023
Melbourne (by Video using Microsoft Teams)
20 June.
[1] Transcript PN212.
[2] Exhibit 3.2, Witness Statement of Clive Callaway, Digital Tribunal Book (DTB) p 56.
[3] Ibid.
[4] Ibid.
[5] Transcript PN76.
[6] Exhibit 4.2, Witness Statement of Yik Tung Tsui, DTB p 115.
[7] Ibid.
[8] Exhibit 3.2, Witness Statement of Clive Callaway, DTB p 56.
[9] Transcript PN124.
[10] Transcript PN 122 and PN132.
[11] Exhibit 4.2, Witness Statement of Yik Tung Tsui, DTB p 115.
[12] Ibid.
[13] Transcript PN135.
[14] Exhibit 4.5, Letter of Service, DTB p 132.
[15] Exhibit 3.2, Witness Statement of Clive Callaway, DTB p 57.
[16] Ibid.
[17] Ibid.
[18] Transcript PN174.
[19] Transcript PN216.
[20] Transcript PN170.
[21] Transcript PN20-22.
[22] Transcript PN23-32.
[23] Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.
[24] Explanatory Memorandum, Fair Work Bill 2008, [1548].
[25] Keiselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864, [34].
[26] Ibid.
[27] Exhibit 4.1, Outline of arguments: Objections, DTB p 99-100.
[28] Ibid.
[29] Transcript PN69 and PN72.
[30] Exhibit 3.1.1, Attachment 1 – Position description General Manger Finance, DTB p 49.
[31] Exhibit 3.1.2, Attachment 2 – Position description Senior Management Accountant, DTB p 50.
[32] Transcript PN87-106.
[33] Transcript PN34-37.
[34] Exhibit 3.3, Outline of arguments: Merits, DTB p 66.
[35] Ibid p 68.
[36] Ibid p 76.
[37] Ibid.
[38] Exhibit 4.1, Outline of arguments: Objections, DTB p 101.
[39] Ibid.
[40] Ibid.
[41] Exhibit 5.1, Reply submissions, DTB p 147.
[42] Transcript PN189.
[43] Transcript PN134-135.
[44] Transcript PN159-164.
[45] Transcript PN178.
[46] Transcript PN171.
[47] Dominic Fitzjohn v Southern Cross Protections Pty Ltd[2015] FWC 2601, [135].
[48] Schneider v Apollo Holidays Pty Ltd[2015] FWCFB 1259.
[49] Schneider v Apollo Holidays Pty Ltd[2015] FWCFB 1259, [28].
[50] Ulan Coal Mines Limited v John Howarth and others[2010] FWAFB 3488, [19]-[20].
[51] Transcript PN215.
Printed by authority of the Commonwealth Government Printer
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