Sriharsha Manoor v United Petroleum Pty Ltd

[2010] FWA 2571

[2010] FWA 2571

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Application for unfair dismissal remedy

Sriharsha Manoor
v
United Petroleum Pty Ltd
(U2009/11863)

Yatish Prasad
v
United Petroleum Pty Ltd
(U2009/12782)

COMMISSIONER SMITH MELBOURNE, 31 MARCH 2010

Termination of employment – jurisdiction – genuine redundancy.

Introduction

[1] These are applications by Mr Sriharsha Manoor and Mr Yatish Prasad pursuant to s.394 of the Fair Work Act 2009 (the Act). Each applicant alleges that he was unfairly dismissed by United Petroleum Pty Ltd (United). Given the common employer and that the facts and circumstances were interrelated, the matters were listed together.

[2] Mr A. Dircks, agent, appeared for both Mr Manoor and Mr Prasad and Mr Millar, of counsel, appeared for United.

[3] In its response to the applications, United raised a jurisdictional objection based upon the persons being the subject of a genuine redundancy. It submitted an unfair dismissal had not occurred consistent with the definition contained in s.385 of the Act.

[4] When the matter came to the Tribunal, a conference was held to ascertain the views of the parties as to how the matter should proceed and whether or not a hearing would be the most effective and efficient way to resolve the matter. It was the view of the parties that a hearing would be the best course as it would enable both the jurisdictional objection and the merits to be considered at the same time.

[5] It was decided that a hearing would be an appropriate course. 1

The legislation

[6] The challenge to the jurisdiction of the Tribunal is an important matter to deal with given that all the evidence was heard. Section 385 provides that a person has been unfairly dismissed if Fair Work Australia (FWA) is satisfied that the dismissal was not a case of genuine redundancy [see s.385(d)].

[7] The meaning of genuine redundancy is set out in s.389.

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

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

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[8] Relevantly, the Explanatory Memorandum stated:

“1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548. The following are possible examples of a change in the operational requirements of an enterprise:

• a machine is now available to do the job performed by the employee;

• the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.

1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.

1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.”

The background facts

[9] This matter raises an unusual set of facts. Both Mr Prasad and Mr Manoor submit that it was not a genuine redundancy because the circumstances of their dismissal really related to an allegation of theft.

[10] Briefly, the evidence of Mr Prasad discloses:

• In about June 2009 the wallet of the Managing Director went missing.



• On 12 August Mr Prasad was called into Mr Hirsh’s office and asked if he (Mr Prasad) knew anything about the missing wallet.



• A suggestion was made that a Mr Abdullah Qadir was suspected of taking the wallet.



• Later on 12 August Mr Prasad was asked to take a lie detector test. It was the evidence of Mr Prasad that he was aware that Mr Singh had been suspended for refusing to take the test so he agreed.



• Mr Prasad took the test the next day and was told that he failed the test. Mr Prasad asked to take the test again and this was arranged for 18 August. He again failed this test.



• On 20 August the Managing Director returned from leave and asked Mr Prasad if he knew of the location of the missing wallet. Mr Prasad said he did not know anything about the wallet and his evidence was that the Managing Director said words to the effect of “its not going to work out for you to stay”. 2



• On 20 August Mr Prasad was suspended but in the context of being directed to take annual leave.



• On 28 September Mr Prasad was advised by email that he was being made redundant and he later received a letter dated 25 September which stated that as a result of operational changes he was being made redundant.

[11] The evidence of Mr Manoor discloses:

• He was aware of the allegations in relation to the missing wallet.



• On 31 July he went overseas on a period of annual leave.



• He rang Mr Singh on 20 August in relation to collecting mail and Mr Singh advised him that Mr Qadir had mentioned him (Mr Manoor) in relation to the missing wallet.



• He returned to Australia on 28 August to be ready to return to work on 31 August.



• Both Mr Prasad and Mr Singh picked him up from the airport on 28 August where he was informed of what had happened and was told that Mr Prasad and Mr Singh had been suspended.



• On 31 August he returned to work but was told not to start until he had spoken to the Managing Director.



• When the meeting took place there was an exchange with the Managing Director where Mr Manoor was accused of stealing the wallet and asked to take a lie detector test.



• Mr Manoor declined and was suspended by the Managing Director.



• That afternoon Mr Manoor was sent a letter advising that his position was redundant.

[12] To complete the picture, on 3 September Mr Singh was dismissed for complicity in theft and failure to divulge knowledge about the matter. Mr Singh was subsequently re-employed by a company associated with United Petroleum. Mr Singh also gave evidence in the proceedings but was not questioned at all on the alleged theft.

[13] There was no attack on the evidence of either Mr Prasad or Mr Manoor relating to the conversations with the Managing Director.

[14] It appears clear from the unchallenged evidence, that in relation to Mr Prasad, a decision had not been taken on his position being redundant earlier than 20 August as he was directed to take annual leave whilst an investigation was taking place on the alleged theft. In relation to Mr Manoor, again it appears clear that the decision in relation to his position being redundant was not made before 31 August otherwise he would not have been suspended for failing to take a lie detector test.

[15] I now turn to the evidence of those witnesses called by United in relation to the decision to make both Mr Prasad and Mr Manoor redundant.

[16] United called two witnesses. They were Mr David Szymczak who is the General Manager and Mr Joel Toey who is the Human Resources Manager.

[17] In relation to Mr Manoor, it was the evidence of Mr Szymczak that to deal with Mr Manoor’s leave it was decided to have his duties performed from the Townsville office. Mr Szymczak’s evidence was that during the first two weeks of Mr Manoor’s leave “it became apparent that there were efficiencies in operating the scheduling in one location rather than split between Melbourne and Townsville.” 3

[18] In relation to Mr Prasad, it was the evidence of Mr Szymczak that during the course of 2009 there had been a process of streamlining and consolidating positions to improve business and reduce expenses. Mr Szymczak gave evidence that five redundancies had taken place. Mr Szymczak’s evidence was that Mr Prasad’s redundancy came down to: “you’ve got three guys that are probably not completely utilised, we need to go down a number, which one do you choose, and unfortunately for Yatish, we chose Yatish.” 4

Conclusion

[19] It was put to Mr Dircks if he considered the redundancy to be a sham. 5 My reason for putting this question was that the evidence of United sought to give the impression that these matters had been under consideration for some time and, in Mr Manoor’s case, had been decided during the first two weeks of his leave. If this were so then the conduct of the Managing Director in requiring a lie detector test and then suspending him, is inexplicable unless United was considering a summary dismissal for theft. The Managing Director, who could give the best evidence, was not called, although in fairness it was submitted that the Managing Director was overseas.

[20] In response, Mr Dircks submitted that the simple test was under s.389(2) and whether or not both could have been redeployed within the employer’s enterprise or associated entity. Further, Mr Dircks submitted that in the case of Mr Manoor s.389(1) was relevant in that the job still existed but it had been moved to a different location.

[21] Nothing was argued by Mr Dircks in relation the operation of s.389(1)(b).

[22] It is clear from the evidence of United that it had a good reason for relocating the work of Mr Manoor to Townsville both during his leave and following. No real challenge is taken to this decision but Mr Dircks submits that Mr Manoor was not asked if he would relocate to perform the duties. In evidence, Mr Manoor said that we would relocate. In response United submitted that it had not put the matter to Mr Manoor but that the cost of relocation would have been significantly more that engaging a person locally which it did.

[23] The following exchange took place between Mr Millar and Mr Toey, the Human Resources Manager, who was giving evidence for United:

“If they had been offered the opportunity to take up the appointment in Townsville, what would have been the consequence of that?---To offer them the appointment, we’d have relocation costs. We’d have to relocate the employee to a Townsville office at our - like, we’d have the relocation costs to the - yes.

Would United generally incur relocation costs of that type for a position at the fuel scheduler level?---No. It was cheaper to go actually re-advertise the position and have someone from up there and the skills of the people up there in Townsville - because you're getting people from the mines that have scheduling backgrounds. 6

[24] In terms of the Act the question arises if it would have been reasonable in all the circumstances for Mr Manoor to be redeployed? This is a difficult matter. To begin, Mr Manoor was not asked and in evidence he said he would have redeployed. In light of the answer given by United, Mr Manoor’s willingness may not have mattered unless he was prepared to do so without cost to the Company. It is clear that s.389(2) is directed towards action being taken by the employer to mitigate the effects of redundancy on an employee. However the intention is not absolute as the Explanatory Memorandum makes clear:“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.” 7

[25] It appears that it is only where an award or agreement provides for such consultation does the requirement to consult impact upon whether or not a genuine redundancy has occurred.

[26] No such award or agreement has been raised for consideration and therefore it would appear that, in terms of the jurisdictional prerequisites, there is no absolute obligation on the employer to consult.

[27] Given this, the question then is whether or not the employer’s reasons, even in the absence of the employee’s views, were reasonable in all the circumstances?

[28] In looking at this question it may be helpful to consider the situation where the employer may have directed the employee to redeploy from Melbourne to Townsville in circumstances where it is resisted. In those circumstances a review of a long line of decisions might lead to the conclusion that a redundancy had occurred given the distance between work locations.

[29] It is difficult to conclude that the cost consideration of the employer is not reasonable also given the relatively short service of Mr Manoor.

[30] It follows that I find that the termination of Mr Manoor was a genuine redundancy and there is no jurisdiction to deal with the application. Mr Manoor’s application is struck out.

[31] I now turn to consider Mr Prasad.

[32] Mr Dircks submitted that both persons could have been offered redeployment. There was only one position and between Mr Manoor and Mr Prasad it was apparent that Mr Manoor had better experience. In any event, the reason why Mr Prasad was selected was explained in these terms: “you’ve got three guys that are probably not completely utilised, we need to go down a number, which one do you choose, and unfortunately for Yatish, we chose Yatish”. 8

The Explanatory Memorandum makes clear that operational reasons include circumstances where 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.

[33] In addition the Explanatory Memorandum states:

“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.” 9

[34] From this it appears clear that the legislature did not intend to alter the authority found in Carter v Village Cinemas Australia Pty Ltd. 10

[35] It follows that I also find that the termination of Mr Prasad was a genuine redundancy and there is no jurisdiction to deal with the application. Mr Prasad’s application is struck out.

COMMISSIONER

Appearances:

A. Dircks for S. Manoor and Y. Prasad.

R. Millar of Counsel for United Petroleum Pty Ltd.

Hearing details:

2010.

Melbourne:

January 19.

 1 See s.399 of the Fair Work Act 2009.

 2   Exhibit D1 paragraph 19.

 3   Exhibit M1 paragraph 6.

 4   Transcript PN47.

 5   Transcript PN718.

 6   Transcript PN 271 & 272.

 7   Explanatory Memorandum to the Fair Work Bill 2008 at paragraph 1550.

 8   Transcript PN47.

 9   Explanatory Memorandum to the Fair Work Bill 2008 at paragraph 1553.

 10 (2007) 158 IR 137 at 144 and 145.

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