Paul Rowland and William McCreadie v Bristow Helicopters Australia Pty Ltd
[2018] FWC 423
•19 JANUARY 2018
| [2018] FWC 423 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Paul Rowland and William McCreadie
v
Bristow Helicopters Australia Pty Ltd
(U2017/8430) (U2017/8431)
DEPUTY PRESIDENT BULL | PERTH, 19 JANUARY 2018 |
Application for an unfair dismissal remedy. Question of whether genuine redundancies. Whether consultation provisions of enterprise agreement apply and have been complied with.
[1] In these applications Mr Paul Rowland and Mr William McCreadie allege that they were unfairly dismissed by their employer, Bristow Helicopters Australia Pty Ltd, when they were both made redundant. Both applicants were dismissed on the same day and due to the facts surrounding their dismissals being sufficiently similar, the unfair dismissal applications were (by agreement) heard together.
[2] Ms Emma Douglas, a Legal and Industrial Officer for the Australian Workers’ Union, West Australian Branch (AWU) appeared for the applicants, and Mr Peter Robertson from the Australian Mines and Metals Association (AMMA) appeared on behalf of Bristow Helicopters.
[3] Bristow Helicopters is a global provider of industrial aviation services including transportation, search and rescue, and aircraft support services including helicopter maintenance and training. Bristow provides search and rescue services to its clients, one a limited service and the other an all-weather service. The all-weather search and rescue service requires dedicated Technical Crew personnel on a 24 hour / 7 day a week basis. 1
[4] Bristow Helicopters objects to the claims of unfair dismissal on the jurisdictional ground the dismissals were genuine redundancies as provided for in s.389 of the Fair Work Act 2009 (the FW Act) and further that the dismissals were not unfair.
Evidence of Applicants
Mr Rowland
[5] Mr Rowland provided a witness statement, 2 gave evidence and was subject to cross examination. Mr Rowland stated he was employed by Bristow in August 2012, initially as an Aircrew Training Instructor. He then became a Technical Crew Examiner and was appointed as a Deputy SAR (Search and Rescue) Chief Crewman in September 2016.3 In his role he was required to provide search and rescue training to aircrew and emergency safety equipment training to all operations personnel.
[6] Mr Rowland’s evidence was that he had never been subject to any poor performance related issues and had been commended for his work with Bristow. 4
[7] He stated that in May 2017, he was approached by Careflight, a competitor of Bristow, to work for them. Although acknowledging that his position at Bristow was ‘precarious’, Mr Rowland states that he declined the offer out of loyalty to Bristow and on the basis of statements made by his Deputy SAR Manager/Chief Crewman, Mr Gordon Watt, that if there were redundancies at Bristow he would be the last to be selected behind Mr Watt. 5
[8] Mr Rowland stated that he had been told by Mr Watt that while no position was safe at Bristow, in the case of a downturn, the employees employed and engaged on skilled visas would be made redundant first. The skilled visa employees had been employed on the basis of Bristow having secured a contract with British Petroleum (which was later cancelled) and in anticipation of a successful bid for work with INPEX Corporation (a Japanese oil company), which did not eventuate. 6
[9] On 5 July 2017, he was contacted by telephone by Mr Watt and told that Bristow had made a decision to remove the existing four positions of Technical Crew Examiner (TCE). He then received a letter via email from the Human Resources Manager dated the same day confirming what Mr Watt had earlier that day told him. 7
[10] The correspondence stated that due to a combination of recent unsuccessful bids and the withdrawal of a previously confirmed project, Bristow needed to reduce its operating costs and manpower requirements to meet current contractual and organisational needs. This would result in:
• a reduction in the overall number of jobs being performed by the Technical Crew
• elimination of the positions of Technical Crew Examiner and Technical Crew Instructor
• creation of two SAR Technical Crew Support Adviser positions.
[11] Mr Rowland was informed that as a result of the above proposed changes, his position would no longer exist. Mr Rowland was then invited to apply for the position of SAR Technical Crew Support Adviser and advised that if he was unsuccessful his position would be made redundant. 8
[12] Mr Rowland was invited to participate in a telephone conference on 7 July 2017, to discuss the likely impacts of the changes and to discuss any measures to avert or mitigate any adverse effect. He was notified of his entitlement to appoint a representative if he wished to. Mr Rowland attended the teleconference, which he stated lasted for approximately 20 minutes. Also participating in the teleconference were Ms Keir Williams the HR Manager, Ms Grainne Fancote from HR and Mr Watt. 9
[13] Mr Rowland stated that Ms Williams explained in more detail what had been expressed in her earlier written correspondence of 5 July 2017. Mr Rowland stated that when asked whether he had any questions, he queried why employees on 457 skilled visas were able to be considered for the newly created positions, to which Bristow replied that he was once on a skilled visa himself and that as permanent employees they have the same employment rights as Australian residents. 10
[14] Mr Rowland’s evidence was that Ms Williams stated that Bristow had contacted other business units to see if there were any positions available, but had been unable to find any other suitable positions within Bristow’s operations. 11
[15] On 17 July, Mr Rowland was advised in writing that he had been unsuccessful in his application for the position of SAR Technical Crew Support Adviser and that his existing position was redundant. The correspondence referred to his redundancy entitlements under the BHA Technical Crew Enterprise Agreement 2015. He was not required to work out his one month notice period. Mr Rowland stated he was not advised why he was unsuccessful in his application for the position of SAR Technical Crew Support Adviser. 12
[16] Mr Rowland was of the view that he could perform the new roles as adequately as the successful applicants. He stated he was currently working on a casual basis in the fumigation industry for a company that he was looking at joining as a business partner.
Mr McCreadie
[17] Mr William McCreadie also provided a witness statement 13, gave evidence and was subject to cross examination.
[18] Mr McCreadie commenced his employment with Bristow as a Technical Crew Instructor in February 2014, until his redundancy on 17 July 2017. Mr McCreadie advised that his role included training and competency checks on instructors, winch operators and winchmen and ensuring training records and certificates of competence were complete and accurate. Mr McCreadie stated that no performance concerns had been raised during his employment. 14
[19] Mr McCreadie’s evidence was that early in 2017, there were reductions in the number of employees in the Technical Crew Department. Mr McCreadie stated that he had a number of telephone conversations with Gordon Watt about the changes occurring at Bristow and was told that if people had to go he would be in the last three, with Mr Watt and Mr Rowland. On this basis Mr McCreadie did not look for other jobs before his redundancy, with the exception of an application he made for a position with competitor Careflight. He was successful in being asked to an interview but did not succeed in obtaining one of the five jobs on offer. Mr McCreadie’s evidence was that even if he had been successful, he was unsure whether he would have accepted a position with Careflight. 15
[20] On 5 July he received an email alerting him to Bristow’s decision to remove the four positions of Technical Crew Instructor and Technical Crew Examiner, signed by Ms Williams. 16 He, like Mr Rowland, was invited to attend a teleconference with Mr Watt and Ms Williams on 7 July. The correspondence also invited him to apply for one of the new positions of SAR Technical Crew Support Adviser.17
[21] Mr McCreadie stated that at the time he was ‘shocked and angry’ as he had been under the impression from Mr Watt that if there were redundancies, the skilled visa employees would be selected for redundancy, not the employees who were permanent residents. He stated that when he was on a skilled visa he was under the impression that he would be made redundant before a permanent resident employee and on this basis became a permanent resident. While Mr Watt did not ‘guarantee’ anything, he was Mr McCreadie’s Line Manager and Mr McCreadie stated he had no reason to question his authority to make comments about how a redundancy scenario would play out. 18
[22] At the teleconference on 7 July, which lasted about 30 minutes, Mr McCreadie had with him an AWU representative. It was his evidence that at the teleconference Ms Williams explained how the SAR Instructor and Examiner positions were no longer required and a new role, which included more administrative and business tasks, was to be created. Voluntary redundancy was available to anyone; however employees not successful in applying for the two new positions would be made redundant. Ms Williams stated that Bristow would give consideration to anything raised during the teleconference. Mr McCreadie queried why the extra requirements could not be added to the existing positions of Instructor and Examiner. Mr Watt explained that the new role was mainly business development. 19
[23] Mr McCreadie stated he then asked whether employees who are permanent residents would have priority for the new positions over employees on a skilled visa. Ms Williams stated that there would be no preferential treatment for permanent residents. 20
[24] Mr McCreadie stated that Mr Watt then said that it would be ‘open and fair’ for all employees to apply for the new positions. Mr McCreadie stated he felt compelled to apply for the new role of an SAR Technical Crew Support Adviser as redundancy was the alternative. On 17 July he received a standard email advising that his application was unsuccessful and that his existing position was redundant. Ms Williams later advised by email that the other candidates were more competitive against the selection criteria, in particular in the area of business development. 21
[25] Mr McCreadie stated he felt ‘betrayed’ by Mr Watt and in particular his failure to even apologise. Mr McCreadie accepted that Bristow had looked for other positions he could occupy but that none could be found.
[26] Mr McCreadie was unemployed at the time of giving evidence, but was due to start a new job as an Aircrewman the following week.
Evidence of Respondent
Mr Daniel Bowden
[27] Mr Bowden is the Area Manager for the respondent, responsible for the planning, directing and coordinating of activities to ensure safe optimisation of results in terms of revenue, profitability, return on investment and future growth. 22
[28] Mr Bowden stated that following the redundancies of the two applicants, that Bristow no longer employs any Technical Crew Instructors or Examiners. Over the last 18 months to two years the Bristow Group had been significantly affected by the global downturn in the oil and gas industry. When he commenced with Bristow in June 2017, they were facing a forecasted loss of $50m over the next four years. 23
[29] Mr Bowden’s evidence was that in January 2017, a major client of Bristow withdrew from its all-weather search and rescue contract. Bristow had been in full training for six months in the lead up to the commencement of the contract and as a result of the cessation of the contract Bristow was required to make two winchmen redundant in February 2017. At the time a decision was made to retain Technical Crew employees and use accrued leave for a period of time, on the basis that the results of work tended for would be announced within a few months. 24
[30] He further stated that on 20 April 2017, Bristow was notified that they were unsuccessful in tendering for a large search and rescue contract to supply all-weather search and rescue support to two major oil and gas clients commencing in June 2017. The financial impact of the failure to gain this work was around $US82m over a five year period. 25
[31] On 8 June 2017 the Bristow Group Chief Executive Officer announced the introduction of structural and leadership changes in an attempt to realign and return Bristow to a competitive and profitable state. He stated that these changes resulted in a significant reduction of headcount across the Bristow Group. 26
[32] On 9 June 2017 Mr Bowden was appointed to his current position as Area Manager for Bristow Australia, tasked with restoring Bristow’s position in the market and to improve cash flow and liquidity. At the time Bristow was forecasting a significant loss of $44m to $50m for the next 12 months. 27
[33] During June 2017, Mr Bowden stated that he visited the Perth office to discuss reorganisation of the business and the need to reduce headcount across several departments to ‘right size’ for current operations and the contracts the business held going forward. A review of the Technical Crew team structure was undertaken which concluded that the business could no longer support the Technical Crew organisational structure in its current form. A decision was made to introduce two Technical Support Adviser roles to work with the business and development team in an effort to obtain more work. At the time Mr Bowden was unaware who within the existing Technical Crew would have the skills to undertake the two Technical Support Adviser roles. 28
[34] Mr Bowden’s evidence was that the changes to the Technical Crew structure did not have an impact elsewhere in the business. 29
Mr Gordon Watt
[35] Mr Gordon Watt is the Deputy SAR Manager of Bristow Helicopters Australia. In this role he is responsible for acting as Line Manager and Supervisor for all SAR Technical Crew, which included both applicants. Mr Watt explained that the respondent, Bristow Helicopters Australia, is part of the Bristow Group of companies which have been negatively impacted by the global downturn in the oil and gas industry. 30
[36] Mr Watt stated that in January to May 2017, he had understood that Bristow would endeavour to retain the Technical Crew staff, including himself, although this position would be continually reviewed. 31
[37] During this period Mr Watt held several informal conversations, including a group conference, to update the Technical Crew on the existing position. Mr Watt stated that he made it clear to the applicants that no one’s position was guaranteed due to the financial instability of Bristow and that the Technical Crew were no longer being funded by any client. 32
[38] Mr Watt stated that he was aware that some Technical Crew employees had either been approached or had applied for positions with other companies. Mr Watt stated that he talked to the applicants on a daily basis and had at no stage advised that their positions with Bristow were in any way guaranteed and that he had no authority to provide such a guarantee. Mr Watt stated that he had been offered, but declined, a position with a competitor. 33
[39] It was Mr Watt’s evidence that in early June 2017, he was informed by Mr Bowden that the Technical Crew department would be reviewed due to clients no longer covering the cost of the employees’ wages, as well as the recent unsuccessful search and rescue contract tender. This meant it was no longer financially viable for Bristow to retain Technical Crew employees in a ‘holding pattern’ in anticipation of future work. 34
[40] Mr Watt stated he was advised in the week commencing 3 July 2017 that the leadership team had proposed that the Technical Crew Examiner and Instructor should be removed from the business which placed all four of his direct reports at risk of redundancy. 35
[41] On 5 July 2017, the Human Resources Manager wrote to both the applicants as well as other affected Technical Crew employees notifying them of the Company’s proposal to introduce a major change which would result in a change to the composition, operation and size of the Technical Crew.
[42] Shortly after the letter was issued, Mr Watt phoned all four affected employees including the applicants to discuss the contents of the correspondence and what this meant. 36
[43] Mr Watt attended the consultation meetings, held separately with each of the applicants, via teleconference. He stated that the need to introduce the changes was explained in more detail than that provided in the correspondence of 5 July. Both applicants were advised that the proposed changes would result in the positions of the applicants no longer being required. 37
[44] Mr Watt’s evidence was that Ms Williams, the Human Resources Manager, advised what actions had been taken to avert or mitigate any adverse effects of the proposed changes, including actively seeking to find suitable alternative positions within Bristow and the wider Bristow Group. The applicants were advised that exhausting annual leave was only a short-term measure and continuing to retain Technical Crew employees was no longer a viable option as there was no work anticipated in the foreseeable future. 38
[45] Mr Watt also advised the applicants that part of positioning Bristow for future opportunities meant a position of SAR Technical Crew Support Adviser would be introduced into the business, which all Technical Crew employees could apply for. Following the teleconference both applicants were sent information regarding the application details for the new position and both applicants subsequently applied for the new positions. 39
[46] Mr Watt stated that he was part of the selection panel with three others for the new SAR Technical Crew Support Adviser positions, where he assessed applications against the selection criteria. On 17 July he was advised by Ms Williams that Mr Rowland and Mr McCreadie were unsuccessful in their applications and would be made redundant. As their Line Manager he then telephoned both applicants to inform them of this outcome. Mr Rowland expressed his disappointment in not being selected and Mr McCreadie didn’t wish to know why he was unsuccessful. 40
[47] Mr Watt stated that the full-time positions of Technical Crew Instructor and Examiner no longer existed in the business; however there was a small element of those roles, taking a few hours per week, which was now absorbed by the new positions of Technical Crew Support Adviser. 41
Ms Keir Williams
[48] Ms Williams is the Human Resources Manager for Bristow with overall responsibility for all employee and industrial relations matters. Ms Williams advised that both applicants were covered by the Bristow Helicopters Australia Technical Crew Enterprise Agreement 2015 (the Enterprise Agreement). 42
[49] Ms Williams’ evidence was that subsequent to the redundancies of the applicants Bristow no longer employs persons in the position of Technical Crew Examiner or Instructor, with these roles no longer existing within its business. 43
[50] She stated that due to the economic downturn in the oil and gas industry impacting on Bristow, it was necessary to consider the needs of the business and structure according to its current operations and contracts. A review of the Technical Crew team structure was undertaken in June 2017, which concluded that the business could no longer support the Technical Crew organisational structure in its current form. Clients were no longer funding the provision of full Technical Crew coverage and potential opportunities for future work did not exist. 44
[51] On 5 July Ms Williams issued a letter of ‘Consultation Regarding Major Change’ to all the Technical Crew notifying them of the intention to remove their current positions from the business and details of a proposed consultation meeting on 7 July. Ms Williams stated that she prepared a script and potential questions and answers for the consultation meetings which were conducted via teleconference individually with each of the applicants. Ms Williams’ evidence was that at 7 July no irreversible decision had been made that redundancies would occur. Bristow had invested significant time, money and resources in training the Technical Crew to execute contracts. The restructure was focussed on winning new work. 45
[52] Ms Williams stated that during the consultation meetings the applicants were advised of the need for change based on the loss of several SAR contracts and the need to reduce operating costs. While there had been some Technical Crew redundancies in February 2017, the majority of staff had been retained in anticipation of a successful tender for a large project which did not eventuate. 46
[53] Ms Williams stated that she outlined to both applicants the efforts Bristow had made to find alternate positions within the business, including raising the question with HR managers globally at fortnightly teleconferences. Unfortunately these enquiries proved fruitless. During the consultation meeting Ms Williams advised the applicants that in attempting to avert or mitigate the need for redundancies, exhausting annual leave was only a short term measure and that continuing to retain their positions was not a viable option as there were no contracts in the foreseeable future. Ms Williams stated that the meeting involved a process where the applicants were advised of all the facts, were invited to ask any questions and were told they were able to apply for a position 47 most aligned with their skills, there being no other positions in existence at the time which were considered suitable or within their skill set or competence.48
[54] In her evidence Ms Williams stated she advised the applicants that the newly approved position of SAR Technical Crew Support Adviser was not a direct opportunity for redeployment, but a position which all Technical Crew could apply for. Both applicants were sent details regarding the new position and both made applications. 49
[55] A review panel was convened to consider all internal applications for the position of SAR Technical Crew Support Adviser and applicants were scored against the selection criteria. 50 Mr Rowland and Mr McCreadie were unsuccessful in their applications under this process.
[56] Ms Williams stated that the Technical Crew employees do not hold senior positions within Bristow and the restructure of the Technical Crew Department had no impact or consequence on anyone else in the business. There were in excess 200 Bristow employees in Australia. 51
[57] Evidence was also received from Mr Michael Nelson, the SAR Manager, Mr Patrick Thirley, the Senior Business Development Manager and Kylie Cardinal, the Human Resources Coordinator, who all participated in the assessment of applicants for the position of SAR Technical Crew Support Adviser.
Submissions of Respondent
[58] The respondent submitted that the termination of the applicants’ employment was made on the ground of their positions being redundant. On this basis they submitted they had a complete defence to the applicants’ unfair dismissal claims pursuant to s.389 of the FW Act. This submission was based on the fact that the applicants’ positions are no longer performed by anyone because of changes in Bristow’s operational requirements.
[59] Bristow relied upon the evidence of its witnesses to demonstrate that the positions were genuinely redundant. In February 2017 two Technical Crew winchmen were made redundant as there was a surplus of SAR Technical Crew as a result of the cancellation of a significant contract. Bristow retained surplus Technical Crew employees, including the applicants, in anticipation of winning a significant additional five year contract. The holding of the surplus employees was to demonstrate that it was ready to execute the work immediately if its bid was successful. In April 2017 Bristow was advised that it was unsuccessful with this bid. In early June 2017 the Bristow Group Chief Executive Officer announced the introduction of a number of structural and leadership changes in an attempt to return Bristow to a competitive and profitable state. Following a review of the Technical Crew team structure, it was concluded that the business could no longer support the Technical Crew organisational structure in its existing form. Bristow’s priority was to win new business going into the future. There was no immediate or potential role for the existing Technical Crew to perform.
[60] A decision was made to create a new position of SAR Technical Crew Support Adviser, for which the applicants were invited to apply for. The role of the SAR Technical Crew Support Adviser was to develop manuals to support a change of direction that the business was going to pursue, assist in tender preparation and work closely with the Business Development and the Search and Rescue teams to win new business.
[61] During the hearing Bristow submitted that the restructure of the Technical Crew Department did not equate to a major change to production, program, organisation, structure or technology in relation to its enterprise. On this basis the Enterprise Agreement consultation terms were not invoked, however should the Technical Crew Department restructure be held to be a major change, Bristow submitted that it had complied with its consultation obligations under the Enterprise Agreement. It was also submitted that it would not have been reasonable in all the circumstances for the applicants to be redeployed within Bristow’s enterprise or the enterprise of an associated entity.
[62] Bristow also submitted that the applicants’ terminations of employment were neither harsh, unjust or unreasonable, should the Commission determine that the dismissals were not genuine redundancies on the basis that the provisions s.389 of the FW Act was not complied with.
Submissions of the Applicants
[63] The applicants accept that their positions no longer exist 52 but submitted the elimination of four positions from the respondent’s business meant there had been a major change as per the consultation clause of the Enterprise Agreement. It was submitted that the elimination of the four positions resulted in an impact as to how the tendering process would be worked on within the Business Development team. It was further put that the consultation requirements under the Enterprise Agreement were not fully satisfied by the respondent.
[64] It was submitted that Bristow had not complied with the consultation requirements as it had made an irreversible decision to terminate the applicants prior to holding the obligatory discussions. It was submitted that when taking a broader view of the meaning of major change, there had been no consultation with the applicants regarding Bristow wishing to secure renewal of contracts or winning new work.
[65] It was also contended that the applicants should have been redeployed into the new positions of SAR Technical Crew Support Adviser over those chosen for the positions.
Legislation
[66] Section 394(1) of the FW Act provides that a person who has been dismissed may apply to the Fair Work Commission (the Commission) for an Order under Division 4 granting a remedy for unfair dismissal.
[67] Section 385 of the Act provides as follows:
“s.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.”
(My emphasis)
[68] Section 396 of the FW Act requires that before considering the merits of an application for an unfair dismissal remedy, the Commission must decide a number of threshold issues:
“s.396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.”
(My emphasis)
[69] As set out above, the respondent submits that the applicants’ termination of employment was based on the ground of genuine redundancy.
[70] One effect of s.396 of the FW Act is that if a dismissal is the result of a genuine redundancy, the Commission need not determine whether the dismissal was harsh, unjust or unreasonable.53
Genuine redundancy
[71] Section 389 of the Act sets out the meaning of genuine redundancy, which is not restricted to whether an employee’s job is no longer required, by reason of s.389(1)(b) and s.389(2) below:
“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”
[72] The Explanatory Memorandum to the Fair Work Bill 2008 states the following in respect of s.389:54
“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 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, 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 employees;
• 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 dismissal is not a case of genuine redundancy if it would have been reasonable in all 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.”
Were the applicants’ positions redundant?
[73] The applicants did not contest that their positions as Technical Crew Instructor/Examiner no longer existed within Bristow’s business. 55 I am satisfied that the respondent has demonstrated as per s.389(1)(a) that the positions were redundant in the sense that Bristow no longer required the jobs to be performed by anyone because of changes in the operational requirements of the enterprise.
Consultation
[74] Bristow must also have complied with any obligations under an applicable enterprise agreement to consult about the redundancies for its jurisdictional defence to succeed. The consultation obligations under the Enterprise Agreement are found at clause 1.8:
“1.8 Consultation Term
This term applies if:
a. The Company has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise; and
b. the change is likely to have a significant effect on the Technical Crew.
The Company must notify the relevant Technical Crew of the decision to introduce the major change.
The relevant Technical Crew may appoint a representative for the purposes of the procedures in this term if:
a. relevant Technical Crew appoint/s, a representative for the purposes of consultation; and
b. the Technical Crew advise the Company of the identity of the representative;
c. the Company must recognise the representative.
As soon as practicable after making its decision, the Company must:
a. discuss with the relevant Technical Crew:
(i) the introduction of the change; and
(ii) the effect the change is likely to have on the Technical Crew; and
(iii) measures the Company is taking to avert or mitigate the adverse effect of the change on the Technical Crew; and
b. for the purposes of the discussion – provide, in writing, to the relevant Technical Crew:
(i) all relevant information about the change including the nature of the change proposed; and
(ii) information about the expected effects of the change on the Technical Crew; and
(iii) any other matters likely to affect the Technical Crew.
However, the Company is not required to disclose confidential or commercially sensitive information to the relevant Technical Crew.
The Company must give prompt and genuine consideration to matters raised about the major change by the relevant Technical Crew.
In this term, a major change is likely to have a significant effect on Technical Crew if it results in:
a. the termination of the employment of the Technical Crew; or
b. major change to the composition, operation or size of The Company’s workforce or to the skills required of Technical Crew; or
c. the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
d. the alteration of hours of work; or
e. the need to retrain Technical Crew; or
f. the need to relocate Technical Crew to another workplace; or
g. the restructuring of jobs.
In this term, relevant Technical Crew means the Technical Crew that may be affected by the major change.”
[75] In addition to clause 1.8 of the Enterprise Agreement, the model consultation term prescribed by the Fair Work Regulations 2009, is taken to be a term of the Enterprise Agreement. 56 The applicants submitted, which I accept, that this did not result in any relevant material change to clause 1.8.57
[76] Bristow further submits that the consultation provisions of the Enterprise Agreement, despite being complied with, have no application on the basis that the Technical Crew Department restructure of four employees does not constitute a ‘major’ change for the purposes of the clause.
[77] The question to be answered is whether Bristow made a definite decision to introduce a ‘major change to production, program, organisation, structure, or technology in relation to its enterprise’. It is beyond doubt that the restructure had a significant effect on the Technical Crew itself.
[78] In the 2016 Federal Full Court decision of Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union 58(Port Kembla) Jessup J stated at [187]:
“As to the second of the two ways in which his Honour characterised the circumstances leading to the termination of the employments of these three employees, again I do not, with respect, agree that the occurrence of a “forced redundancy” makes the underlying, or corresponding, change a “major” one. If many employees were to be made redundant, there may well have been a major change with which those redundancies were associated, but the size and importance of the change would have to be assessed by reference to facts which went beyond, although they may include, the facts of the redundancies. In the present case, it is enough to reiterate that the forced redundancy of three employees out of a workforce of about 98 did not of itself constitute a major change within the meaning of cl 7.1.”
[79] Justice White made the following observations at [499]:
“The second qualification is that I do not regard a simple comparison between the number of employees to be terminated, and the number of the employees in its workforce overall, for which PKCT contended, as being necessarily conclusive of the question of whether a change is “major”. Much may depend on the circumstances of a given case including, for example, the seniority and importance of the employees in PKCT’s operations, the extent to which PKCT’s employees work in an integrated or disconnected manner; the consequences for the continuing employees of the redundancies and consequent terminations, as well as other matters.”
[80] The Full Bench decision of Nick Tsiftelidis v Crown Melbourne Limited59 held that the meaning of ‘major workplace change’ in a consultation clause in an enterprise agreement did not capture individual redundancies on the basis that individual redundancies do not constitute a “major change” to the employer’s operations that impact upon a collective of employees. In this case there are four positions being made redundant and two employees being dismissed on the ground of redundancy, from a business employing over 200 employees.
[81] Having regard to the evidence of Bristow’s witnesses and the submissions of the applicants to the contrary, I am of the view that the Technical Crew department restructure was not a major change to the enterprise. With respect to the Technical Crew, the evidence was that the four redundancies had no impact or effect on any other part of the respondent’s business, or if it did, it was minimal at best. It was undertaken as a separate exercise. The applicants were unable to produce any evidence about the impact of the Technical Crew restructure outside the Department which might otherwise suggest it was a major change to the enterprise. 60 The applicants’ redundancies occurred as there was no meaningful work for them to perform in their existing roles and their positions were unfunded. There was no evidence this had any impact on Bristow’s operations outside the Technical Crew Department.
[82] Despite the conclusion above, I further find that if the Technical Crew restructure met the definition of ‘major’ change for the purposes of the Enterprise Agreement, Bristow complied with its consultation obligations under the Enterprise Agreement.
[83] Bristow is required to notify the applicants of the decision to introduce the change which it did as per the correspondence to the applicants dated 5 July 2017.
[84] As soon as practicable after making its decision, Bristow is required to discuss with the applicants the introduction of the change and the effect the change was likely to have on them and measures that Bristow was taking to avert or mitigate the adverse effect of the change. The teleconferences held with the applicants individually, and in the case of Mr McCreadie with his representative on 7 July, were conducted for this purpose. As Ms Williams’ briefing notes for the meeting demonstrate and as per her evidence, the restructure and likely effect on the applicants and measures taken by Bristow to avert or mitigate these adverse effects were explained to the applicants.
[85] For the purposes of the discussion, Bristow is required to provide in writing the relevant information about the change, the expected effects of the change and any other matters likely to affect the applicants. This information was also contained in the respondent’s correspondence to the applicants dated 5 July 2017. The applicants were also requested to put forward their own ideas and suggestions following their 7 of July teleconference. 61
[86] The evidence demonstrated that Bristow:
• notified the applicants as soon as practicable of the decision to make their position redundant;
• conducted discussions with the applicants which it commenced as soon as practicable following its decision;
• provided in writing the relevant information to the applicants;
• undertook activities to avoid, minimise or mitigate the adverse effects of the redundancy on the applicants; and
• concluded it was not reasonable, to redeploy the applicants elsewhere in the business or an associated entity.
[87] In my view the evidence demonstrates that a bona fide opportunity was provided to influence Bristow’s decision making process following the review it had undertaken. I do not accept that there had been an irreversible decision made to make the applicants redundant prior to discussions with the employees themselves. The redundancies occurred after the applicants unsuccessful applications for the positions of Technical Crew Support Adviser. The respondent’s witnesses were subject to extensive cross examination over the process that led to the redundancies, but this did not extract any concessions that the consultation process under the Enterprise Agreement was not complied with.
[88] It should also be noted that a contravention of an enterprise agreement, i.e. not complying with a consultation clause, is a contravention of a civil remedy provision under the FW Act 62 and for the reasons provided by Flick J in Australian Building and Construction Commissioner v Hall63 and those of O’Callaghan J in Australian Nursing and Midwifery Federation v Bupa Aged Care Australia Pty Ltd64 a finding that an enterprise agreement has been contravened should not be made lightly.
Redeployment
[89] Section 389(2) also requires the Commission to be satisfied that it would not have been reasonable for the applicant to have been redeployed within the employer’s enterprise or that of an associated entity of the employer, if the defence of genuine redundancy is to be made out.
[90] On the evidence available to the Commission it was demonstrated that it would not have been reasonable to redeploy the applicants in the circumstances which existed at the time. Ms Williams’ evidence was that Bristow did not have any suitable alternative employment opportunities for the applicants, despite her efforts to identify such positions during the consultation period. 65
[91] In all respects the requirements of s.389 of the FW Act were met by Bristow and as such, a complete defence to the claim of unfair dismissal has been made out. Based on this conclusion, I am not required or able to consider the substantive application under s.387, as the applicants’ terminations of employment amount to a genuine redundancy pursuant to s.389 of the FW Act and thus are excluded from the FW Act’s definition at s.385 of an unfair dismissal.
[92] It appeared clear through the evidence of both applicants that their actual grievance was that they had been led to believe that should their positions become redundant, which they understood was a possibility, they would be retained in preference to other employees in the Technical Crew. This understanding emanated from discussions held with their direct Manager, Mr Watt. While Mr Watt’s evidence was that he made it clear to the applicants that no one’s position was guaranteed, I accept the applicants’ evidence that they were under the impression that their positions would be the last to go in the event redundancies occurred in the Technical Crew Department.
[93] What actually occurred was not contemplated by either Mr Watt or the applicants in that the four Technical Crew Instructor/Examiner positions were made redundant and a new role directed towards skills in technical/manual writing and business development to assist in winning new work, with an element of search and rescue knowledge to cover the regulatory requirements within the business, was created. This is clearly outside any discussions that may have occurred between the applicants and Mr Watt.
[94] As the Explanatory Memorandum states, whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. As stated by Hatcher VP in Tebikenibeu Low v Menzies Property Services Pty Ltd 66
“[16] It is not the function of the Commission, in determining whether a dismissal is a case of genuine redundancy, to form a view about the merits of the decision to make a position redundant. Whether it was objectively fair or justifiable to decide to abolish a position is beside the point, as long as the employer acted as it did because of changes in its operational requirements.”
[95] The applicants were among four employees whose positions were made redundant. They were selected for redundancy on the basis of being unsuccessful in applying for the two newly created positions. Despite the submissions of the applicants, there was no obligation on Bristow to provide preferential treatment to the applicants over others when considering the applications for the vacant positions.
[96] The respondent’s jurisdictional objection is upheld and the applications are dismissed for want of jurisdiction.
DEPUTY PRESIDENT
Appearances:
Ms E. Douglas AWU on behalf of the applicants
Mr P. Robertson AMMA on behalf of Bristow Helicopters
Hearing details:
2017
Perth
October 27 and 31
1 November
1 Respondent’s Outline of Submissions, 2 October 2017
2 Exhibit A1, Statement of Paul Rowland, 10 October 2017
3 Bristow’s submissions and evidence referred to Mr Rowland as being employed as a Technical Crew Examiner in a full time capacity without reference to an appointment to Deputy SAR Chief Crewman
4 Exhibit A1 at [9]
5 Exhibit A1 at [10]
6 Exhibit A1 at [10] – [13]
7 Exhibit A1 at [15], [16]
8 Letter of 5 July 2017
9 Exhibit A1 at [17], [18]
10 Exhibit A1 at [21]
11 Exhibit A1 at [23]
12 Exhibit A1 at [26], [27], Attachment 10
13 Exhibit A2, Revised Statement of William McCreadie, 29 October 2017
14 Exhibit A2 at [4] – [9]
15 Exhibit A2 at [10] – [14]
16 The letter was in similar terms to that received by Mr Rowland
17 Exhibit A2 at [17], Attachment 6
18 Exhibit A2 at [16]
19 Exhibit A2 at [20] - [24]
20 Exhibit A2 at [31], [32]
21 Exhibit A2 at [33], [37], [38], [40], Attachment 11
22 Exhibits R9 & R10, Statement of Daniel Bowden, 28 September 2017
23 PN40
24 Exhibit R10 at [11]
25 Exhibit R10 at [12]
26 Exhibit R10 at [13]
27 Exhibit R10 at [14]
28 Exhibit R10 at [15], PN47, PN64
29 PN19
30 Exhibit R7 & R8, Revised Statement of Gordon Watt, 13 October 2017
31 Exhibit R8 at [34]
32 Exhibit R8 at [35]
33 Exhibit R8 at [39], [40]
34 Exhibit R8 at [14]
35 Exhibit R8 at [15]
36 Exhibit R8 at [17]
37 Exhibit R8 and R7 at [18]
38 Exhibit R8 and R7 at [19], [20]
39 Exhibit R8 and R7 at [21]
40 Exhibit R8 and R7 at [43], [48], [49]
41 Exhibit R8 at [31]
42 Exhibit R1 and R2, Revised Statement of Keir Williams, 16 October 2017, at [2], [8]
43 Exhibit R1 at [10]
44 Exhibit R2 at [11], [15]
45 Exhibit R2 at [28], [29], [34]
46 Exhibit R1 and R2 at [20]
47 The position being SAR Technical Crew Support Adviser
48 Exhibit R1 and R2 at [21], [22]
49 Exhibit R1 at [23], Attachment 4; Exhibit R2 at [23], Attachment 3
50 Exhibit R1, Attachment 13; Exhibit R2 Attachment 12
51 Mr Nelson stated there were around 250 employees in July 2017. The respondent’s written submissions at [36] made in respect to the unfairness of the dismissals referred to ‘some 300 employees’
52 PN190/196
53 UES (Int’L) Pty Ltd v Harvey[2012] FWAFB 5241
54 See Acts Interpretation Act 1901 in using Explanatory Memorandum to confirm the meaning of words in an Act.
55 PN196
56 Agreement approval decision [2015] FWCA 2627 at [4]
57 PN179
58 [2016] FCAFC 99, 248 FCR 18 at 72
59 [2016] FWCFB 4675
60 See for example O’Callaghan J in Australian Nursing and Midwifery Federation v Bupa Aged Care Australia Pty Ltd [2017] FCA 1246 at [27]
61 See email of 7 July 2017 to applicants from Ms Fancote
62 Section 50
63 [2017] FCA 274 at [19] and [20]
64 [2107] FCA 1246 at [30]
65 For example there were discussions on potential winchmen requirements in the African region but this did not eventuate. See paragraph [21] of Ms Williams’ witness statement Exhibit R1
66 [2014] FWC 7829
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