Richard Gorkowski v AGR Asia Pacific Pty Ltd
[2010] FWA 7507
•28 SEPTEMBER 2010
[2010] FWA 7507
The attached document replaces the document previously issued with the above code on 28 September 2010.
The year ‘2009’ has been replaced with ‘2007’ in paragraph 2.
Rebecca Lee
Associate to Commissioner Bissett
Dated 4 October 2010
[2010] FWA 7507 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Richard Gorkowski
v
AGR Asia Pacific Pty Ltd
(U2010/9374)
COMMISSIONER BISSETT | MELBOURNE, 28 SEPTEMBER 2010 |
Application for unfair dismissal remedy.
[1] This is an application by Richard Gorkowski for a remedy from unfair dismissal.
[2] Mr Gorkowski was employed by Upstream Petroleum as Operations Accountant in Melbourne. Upstream Petroleum subsequently became AGR Asia Pacific Pty Ltd (AGR). Mr Gorkowski commenced employment on 15 January 2007 and his employment was terminated on 21 May 2010.
[3] Mr Gorkowski claims the termination of his employment was harsh, unjust or unreasonable and that the decision to terminate his employment was not for genuine operational reasons but was a manufactured redundancy brought about because he, Mr Gorkowski, had made complaints of bullying and harassment against his supervisor.
[4] AGR claims that Mr Gorkowski’s employment was terminated due to redundancy and that this redundancy was for genuine operational reasons.
[5] Mr Gorkowski represented himself in proceedings and was a witness on his own behalf. On application by him Mr Craig McNally was summonsed to appear as a witness.
[6] AGR was represented by Ms O’Duill and called as witnesses:
- Mr Brett Smith, Senior Vice President Asia Pacific;
- Mr David Williamson, Chief Financial Officer;
- Ms Melissa Morris, Human Resources Manager; and
- Mr James Chu, Offshore Operations Manager.
Background
[7] The work of AGR relevant to this matter is effectively summarised in the written witness statement of Mr Williamson:
Upstream Petroleum Pty Ltd (now AGR) entered into a contract with Anzon Australia Pty Ltd (“Anzon”) in 2004 to perform project management, operations and maintenance services for Anzon, who was the operator of the Joint Venture which owned the Basker, Manta and Gummy oil fields (“BMG”).
Under this contract, AGR worked with Anzon to develop, operate and maintain the BMG fields. AGR employed a team of people to work on this project. The compositions of this team changed over time as the development needs of Anzon and the BMG field have changed.
In September and October 2008, Roc Oil Company Limited completed a successful takeover bid for Anzon. Anzon was renamed Roc Oil (Vic) Pty Ltd and Roc assumed the role of operator of the BMG field of (sic) behalf of the BMG Joint Venture parties.
...
In early February 2010, Roc Oil released data to the ASX which indicated a significant downgrade in the reserves of the BMG field. 1
[8] AGR is the licensed operator of the BMG field 2 on behalf of Roc Oil (the client). Roc Oil engages AGR under contract. Mr Gorkowski worked in the area of AGR responsible for the BMG project. As such Mr Gorkowski’s employment (and that of his colleagues) is tied to the on-going BMG project.
[9] Following the announcement to the stock exchange it appears that Roc Oil sought to find savings in the business including reviewing the work being done for it by AGR. 3
[10] A number of meetings between management of AGR and Roc Oil took place. 4 Through these it became evident that Roc Oil believed there were savings that could be made in the finance and procurement areas of the BMG project within AGR.5 AGR put a number of propositions to Roc Oil on the efficiencies that could be made on the finance side in a number of key areas: people, enablers (systems), procedures, and reporting.6
[11] An effect of these proposals was that there could be positions at AGR excess to requirements. 7 Some functions of the position would be taken over by Roc Oil directly whilst others would be distributed amongst other employees of AGR. In the longer term AGR expects further staff reductions.
[12] Plans by AGR to put in place a project manager position to implement the proposed changes did not proceed due to lack of funding. 8
[13] The discussions between AGR and Roc Oil occurred at appropriate senior levels of both organisations. From AGR, with respect to finance and procurement, Mr Williamson was extensively involved in the development of proposals through AGR and discussion of these with Roc Oil. 9 Relevantly, Mr Chu was not involved in these decisions.
[14] The decision to restructure was driven by the requirements of Roc Oil. As a result of the changes identified and agreed to by the client AGR determined that Mr Gorkowski’s position was excess to requirements. Attempts to find a suitable position to redeploy Mr Gorkowski into were unsuccessful. 10
[15] Mr Gorkowski was not involved directly in discussions between AGR and Roc Oil but he was aware they were occurring.
[16] Mr Gorkowski worked in the BMG Project group. His immediate manager was Mr Chu. It appears that since mid 2009 Mr Gorkowski and Mr Chu did not have a harmonious working relationship.
[17] Mr Gorkowski was subject to counselling and a written warning in July 2009 with respect to the tone and number of his email communications with the clients, including the number of people he copied into those emails. 11 He was subsequently subject to formal performance management.12
[18] On 23 August 2009 Mr Gorkowski had a personal situation with respect to renovations being conducted on his house, and telephoned Mr Chu to advise he would not be in at work that day. 13 Mr Chu responded by telling Mr Gorkowski he was ‘fired’.14 Mr Chu claims he said this as he was frustrated by Mr Gorkowski’s absences.15 Mr Chu claims he quickly regretted his statement to Mr Gorkowski and a few days later met with him and apologised. Mr Chu understood that Mr Gorkowski had accepted the apology and considered the matter resolved.16
[19] Mr Gorkowski, while accepting the apology, understandably took the statement of Mr Chu with some concern about whether or not he had a job. Mr Gorkowski considered the behaviour of Mr Chu to be bullying and harassment and victimisation and raised this with the (then) HR Manager (Mr La Spina). He advised Mr La Spina that he was not so concerned with what had been said but what he saw as the ‘attitude and behaviour’ towards him. 17
[20] During September/October Mr Gorkowski sought some additional resources for his team. This was rebuffed in an email from HR. Again Mr Gorkowski considered the behaviour bullying and victimisation. 18
[21] Mr Chu gave evidence that during October 2009 his concerns over Mr Gorkowski’s ability to manage his team were becoming more serious. 19A decision was made in October to relieve Mr Gorkowski of his management responsibilities.20 At around this time Mr Gorkowski had a further disagreement with Mr Chu over a decision by Mr Chu to send one of Mr Gorkowski’s staff to Brisbane and then, later, to Sydney. Mr Gorkowski objected to the Brisbane trip as he thought the employee required assistance and would not be able to do the work required of him. He objected to the Sydney trip as he considered the employee was not performing in his duties in Melbourne and should not be ‘rewarded’ for this by being sent to Sydney for work.
[22] A further work performance meeting was held with Mr Gorkowski in November 2009, attended by Mr Chu and Mr Page (HR). 21 Those attending the meeting discussed whether or not Mr Gorkowski should have been undertaking certain work. Again Mr Gorkowski felt he was being bullied and victimised.
[23] On 18 December 2009 Mr Gorkowski lodged a formal (internal) complaint alleging bullying, harassment and victimisation of him by Mr Chu and Mr Page. 22 As a result of this formal complaint management determined that Mr Williamson should undertake an investigation into and report on the matter.23
[24] Mr Williamson's evidence is that, given it was close to Christmas, he determined to do some background research into the best way to conduct the investigation and to formally interview Mr Gorkowski, Mr Chu and Mr Page in January 2010 when all were back from the Christmas break. 24
[25] In early January all staff were advised of the outcomes of their salary review process. While all staff who worked with Mr Gorkowski received an increase of 5%, Mr Gorkowski only received a 2% increase. Mr Gorkowski considered this further evidence of bullying and added this to his December complaint.
[26] As a result of his investigation and interviews Mr Williamson determined that, while Mr Gorkowski believed he was being bullied and harassed by Mr Chu and Mr Page, this was not the case. Mr Williamson found that Mr Gorkowski was subject to performance management and that this was a legitimate activity for the business to undertake. 25 Mr Williamson completed his investigation in early 2010. As he was then proceeding on leave, the report was provided to Mr Smith and Ms Morris (now HR Manager).
[27] Mr Smith and Ms Morris met with Mr Gorkowski on 26 February 2010 to discuss the outcome of the investigation into Mr Gorkowski’s complaint. Mr Gorkowski did not accept the outcome of the investigation. Mr Gorkowski’s belief of what was to occur following the completion of the report and arising from the meeting did not accord with that of either Ms Morris or Mr Smith. Mr Gorkowski believed that his salary increase would be reviewed, that he would be given back the management of his team and that he would be able to report to a manager other than Mr Chu. Whilst Ms Morris admitted that she said she would see what she could do on these, 26 Mr Smith is clear that he did not agree to do any of these.27 Further, Mr Gorkowski took things from the meeting that both Ms Morris and Mr Williamson say are erroneous.28 As at May 2010 Mr Gorkowski still considered the matters of his salary, management and reporting lines outstanding.29
[28] The outcomes of the complaint made by Mr Gorkowski and the review of finance and procurement matters in conjunction with Roc Oil coincided through February and onwards in 2010.
[29] As a result of the review undertaken in conjunction with Roc Oil, including changes to the conduct of and responsibility for the monthly reports, AGR determined that Mr Gorkowski was excess to requirements. An outcome of the review was that there was less work required to be done by AGR to support Roc Oil. As the positions within the BMG team at AGR are based on what the client is prepared to pay for, a decision by Roc Oil to no longer support the same level of service as before meant that the operational requirements of AGR had changed.
[30] Mr Gorkowski was advised of the decision to declare his position redundant and terminate his employment on 21 May 2010. Mr Gorkowski was paid redundancy pay in excess of the minimum requirements, 30 was paid out his notice period and was paid all outstanding leave etc. Mr Gorkowski was also provided with outplacement and other support services.31
Legislative provisions
[31] Section 385 of the Act states
385 What is an unfair dismissal
A person has been unfairly dismissed if FWA 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.
[32] There is no disagreement that Mr Gorkowski was dismissed from his employment.
[33] Issues associated with the Small Business Dismissal Code are not relevant to this matter.
[34] For a person to have been unfairly dismissed each of the criteria (as are relevant) in s.385 must be satisfied. If just one of the relevant criteria is not satisfied, a person has not been unfairly dismissed. It is not necessary to demonstrate that none of the four requirements have been met. If, as claimed by the employer, Mr Gorkowski’s dismissal was a case of genuine redundancy then he has not been unfairly dismissed. It is appropriate to determine this matter first. Should I find the termination of employment not to be a case of genuine redundancy, only then will I need to consider if the termination of employment was harsh, unjust or unreasonable (although the merits arguments on the dismissal have also been heard).
[35] Section 389 of the Act states:
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.
[36] The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal may be a case of genuine redundancy:
1547 Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548 The following are possible examples of a change in the operational requirements of an enterprise:
- a machine is now available to do the job performed by the employee;
- the employer‘s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
- the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person‘s job no longer exists.
[37] Clearly the existence of such circumstances as set out in the Explanatory Memorandum will not be determinative of a genuine redundancy but guidance can be taken from the examples provided.
[38] The first matter for consideration is whether the termination of Mr Gorkowski was a case of genuine redundancy.
Consideration and findings
[39] The work done by Mr Gorkowski and his colleagues was undertaken for Roc Oil.
[40] Roc Oil, as the client, paid for the work undertaken on its behalf by AGR. If the BMG project shut down at the end of its life the relationship between Roc Oil and AGR would cease. AGR would then have staff who had worked on the BMG project who would be excess to the requirements of AGR and would have to be redeployed to other areas of the business or retrenched.
[41] The arrangement between AGR and Roc Oil for the funding of the work undertaken on Roc Oil’s behalf means that changes in the demands of the client are inevitably reflected in changes at AGR. If the client believes they can carry out the work themselves or demand efficiencies of AGR then AGR must either absorb those savings (through for example adding to their own overheads or by redeployment) or make staff redundant commensurate with the necessary restructuring.
[42] I find that the reduction in staff in the finance area of AGR working on the BMG Project is clearly attributable to changed operational requirements of AGR brought about by demands of the client. Roc Oil had ceased to require that the monthly reporting be carried out by AGR and had sought improvements in systems and processes, further reducing the work they required to be undertaken by AGR.
[43] As a result of these changed requirements some of the work done by Mr Gorkowski was no longer required to be undertaken. This included the monthly report function that he was responsible for (although he did have staff assist him in this) and the client liaison function (which Mr Gorkowski says was work he had performed) which had been escalated to higher levels of management.
[44] A job can be excess to requirements in circumstances where not all of the functions of the job are excess to requirements. In Ulan Coal Mines Limited v Henry Jon Howarth and others 32 a full bench of Fair Work Australia considered the use of the expression ‘a person’s job’ in the Act33 and what this meant in the context of a genuine redundancy:
[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
[18] In Kekeris v A. Hartrodt Australia Pty Ltd[2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” (at par [27]) 34
[45] The implication of this decision is that it is not necessary for all of Mr Gorkowski’s functions to be redundant for his job to be no longer required to be performed by anyone. It is legitimate that, in considering the operational needs of the business, parts of Mr Gorkowski’s job were no longer required to be performed but other parts of his job have been distributed to others in the workplace.
[46] AGR had two options given the change in the requirements of its client. They could seek to redeploy Mr Gorkowski or make him redundant. The evidence of Ms Morris is that she sought redeployment opportunities for Mr Gorkowski but was unable to identify any. Ultimately the decision was made to make him redundant.
[47] Of the evidence provided with respect to the demands of Roc Oil and the changes required within AGR I accept the evidence of Mr Smith and Mr Williamson over that of Mr Gorkowski. Mr Gorkowski’s evidence was made up substantially of assertions, conjecture and unsubstantiated claims (though he may have believed them to be true).
[48] Whilst Mr Gorkowski claims that he should have been involved in discussions with the client on the basis of its changed requirements, such involvement is well beyond any consultation that may have been required under any award or agreement that applied to his employment. In any event it is a matter for AGR management to determine who should be involved in such meetings.
Findings
[49] Within the meaning of the Act and based on the evidence presented I find in all the circumstances that AGR no longer required Mr Gorkowski’s job to be performed by anyone because of changes in the operational requirements of AGR. This was brought about by changes to the requirements of the client.
[50] There was no evidence given of any award or enterprise agreement that applied to Mr Gorkowski, or that consultation requirements in such an instrument, should they exist, had not been complied with.
[51] AGR undertook efforts to find redeployment opportunities for Mr Gorkowski. In all of the circumstances I find that redeployment was not possible.
[52] I therefore find that Mr Gorkowski’s dismissal was a case of genuine redundancy.
[53] On the basis of these findings I also find that Mr Gorkowski has not been unfairly dismissed within the meaning of s.385 of the Act.
[54] The application is dismissed.
COMMISSIONER
Appearances:
R. Gorkowski, on his own behalf.
C. O’Duill, for the Respondent.
Hearing details:
2010.
Melbourne:
8 & 9 September.
1 Exhibit AGR4, paragraphs 2-4, 6.
2 Transcript PN67.
3 Exhibit AGR2, paragraph 20.
4 Exhibit AGR2, paragraphs 20-24; Exhibit AGR4, paragraphs 7-13.
5 Transcript PN152.
6 Exhibit AGR4, Attachment C.
7 Exhibit AGR2, paragraph 24; Transcript PN157.
8 Transcript PN680.
9 See generally Exhibit AGR 4.
10 Exhibit AGR5, paragraphs 11 & 13.
11 Exhibit G1, pp1-2, Exhibit AGR 6, paragraph 25.
12 This is not disputed by any of the parties though the exact timing of this is not clear.
13 Exhibit G1, page 4.
14 Exhibit AGR6 paragraph 27; Exhibit G1, page 4.
15 Transcript PN1051.
16 Transcript PN1051-3; Exhibit G1, page 6.
17 Exhibit G1, page 6.
18 Exhibit G1, page 8.
19 Transcript PN1102.
20 Transcript PN1113-9.
21 Transcript PN1298; Exhibit G1, page 15.
22 Exhibit G1, attachment 27.
23 Transcript PN517.
24 Transcript PN518.
25 Exhibit G1, attachment 34; Transcript PN519.
26 Transcript PN837-9 & 842-3.
27 Transcript PN112.
28 Transcript PN325, 415, 809.
29 Exhibit G1, attachment 35.
30 Transcript PN966.
31 Exhibit AGR5, paragraph 17.
32 [2010] FWAFB 3488.
33 Section 389(1)(a).
34 [2010] FWAFB 3488, [17]-[18].
Printed by authority of the Commonwealth Government Printer
<Price code C, PR502110>
2