Surbhi Koak v Air Consulting Australia Pty Ltd
[2024] FWC 1382
•28 MAY 2024
| [2024] FWC 1382 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Surbhi Koak
v
Air Consulting Australia Pty Ltd
(U2024/945)
| DEPUTY PRESIDENT O’NEILL | MELBOURNE, 28 MAY 2024 |
Application for an unfair dismissal remedy – genuine redundancy – application dismissed.
Introduction
Ms Surbhi Koak made an application for an unfair dismissal remedy on 29 January 2024 alleging she was dismissed on 18 January 2024 by Air Consulting Australia Pty Ltd trading as Airswift. Airswift contends that the termination of the Applicant’s employment was a case of genuine redundancy.
This issue was dealt with at a hearing on 17 April 2024. Both parties were granted permission to be represented. After considering the views of the parties, I considered that a hearing was the most effective and efficient way to conduct the matter.
For the reasons set out below, I have concluded that the termination of Ms Koak’s employment was a case of genuine redundancy. Accordingly, it was not an unfair dismissal.
Factual background and findings
Airswift is a labour hire provider. Its clients are predominantly in the energy and infrastructure sectors. It has also recently started operating in the information technology sector, leveraging its other clients. The information technology team is the smallest team within the Respondent’s Australia and New Zealand operations, making up approximately 10% of the company’s roles and revenues. The depth of roles available in this team is far less than in other divisions of the Respondent’s operations which reduces the ability to move people from one assignment to another in information technology roles.[1]
The Applicant responded to a job advertised by the Respondent on the Seek.com website. The advertisement described the role as a Melbourne based role on a 12-month contract. It did not specify that it was a casual role.[2] Mr Chua, the Recruitment Manager – Technology for the Respondent, interviewed the Applicant on 1 March 2023 for the role. That day he also sent an email that included that it is a “role with ExxonMobil as a Process Analyst on a 12-month contract in Melbourne.”[3]
ExxonMobil is a client of the Respondent, and under their contract ExxonMobil has a right to terminate the assignment of an employee of Airswift at any time without notice and for any reason.
Ms Koak’s evidence is that the position was never referred to as a casual job and was always referred to as a 12-month contract. Ms Koak’s evidence is that she would never have accepted the role if it had been made clear to her that it was on a casual basis, as she had received a firm offer from another company, although at a lower rate of pay.
Mr Chua’s evidence is that during the interview, he informed the Applicant that the role was for a casual contract. He says that he never referred to the contract as being a fixed term contract (and cannot recall the last time he had a fixed term contract to fill, as all the roles in his portfolio are either permanent or casual arrangements).[4] Ms Koak does not specifically recall the details of this discussion with Mr Chua and agreed that it was possible Mr Chua had advised her that the role was casual, although she did not recall this.[5] Her evidence is that the usual arrangement for contract IT work, is that the work will be for a set period of time and payments made on a casual pay schedule.[6]
Ms Koak was offered the position on 28 March 2023 in a telephone call from Mr Chua, following two interviews with ExxonMobil management and agreement on a daily rate being reached. Mr Chua’s evidence is that he expressed the offer as ‘pending due diligence’. Between this date and when the Applicant commenced the assignment on 8 May 2023, the Applicant underwent significant background checks.
Ms Koak’s evidence is that she accepted the offer of employment on 28 March 2023, which was before she received the contract and other documents subsequently sent to her on 3 May. She also claims that she did not receive these documents until after she commenced in the role on 8 May 2023. However, the electronic records show that Ms Koak received a Casual On-Hire Employment Agreement on 3 May 2023 at 10:43:55am, that she viewed the contract at 10:47:11am on 3 May 2023, and that she electronically signed the contract at 10:06:01am on 8 May 2023. This was the day she commenced the position of Process Analyst for ExxonMobil.[7]
The Casual On Hire Employment Agreement clearly specifies that it is a casual engagement, including in the title, clauses dealing with the duration and scope of the agreement, the status and engagement, hours of work, leave entitlements, and public holidays.[8] The Assignment Description states that it should “be read in conjunction with your casual on-hire employment agreement” and that the rate of pay is “$85.64 per hour worked inclusive of 25% casual loading per Clause 4.1(c) of Agreement.”[9] Each of the payslips produced by the Applicant also clearly state that the basis of the employment is casual.[10]
Ms Koak raised no concerns or queries as to why, contrary to her asserted understanding (and reason for accepting the role), the position was a casual and not fixed-term position. She did not do so when she received and signed the contract that explicitly stated that it was a casual engagement, nor when she commenced working and started receiving payslips stating the casual basis of the role, nor at any other time prior to the termination of her employment.
On 18 January 2024 ExxonMobil advised the Respondent that the Applicant’s assignment with it was cancelled. No reason was given. The Respondent did not replace the Applicant with another employee at ExxonMobil.
Ms Koak was absent from work on that day. Some time later, following a request by Ms Coen, Ms Koak amended her timesheet to reflect that she did not work on 18 January 2024, and acknowledged in her evidence that she was not entitled to payment for that day as she was absent.[11]
The day ExxonMobil terminated the assignment, Mr Chua had two telephone calls with Ms Koak. In the first, he informed her that ExxonMobil had terminated the assignment, that it was likely her employment would be terminated and asked her whether she was aware of why they might have done so. In the second call about an hour later, Mr Chua advised Ms Koak that her employment was terminated, and this was then confirmed by written notice.
Mr Chua says that between the two telephone calls with Ms Koak, he considered whether there were any other suitable roles available but concluded there were not. His evidence was that there were only a small number of roles available at that time in Australia, and Mr Chua’s assessment was that due to their specialised nature requiring extensive experience, Ms Koak did not have the requisite skills for these alternative roles.
One was a stack developer role based in Perth. The Applicant had advised that she was prepared to relocate. Mr Chua states that he concluded that she did not have the skills because the role required a specialist software engineer, which the Applicant was not. He also considered her suitability for a Senior Contracts and Procurement Advisor position but assessed her to be unsuitable because it required someone with that experience and background including dispute resolution, intellectual property and supply chain.[12] There was also a GIS data position and a PMO data analyst role. Mr Chua’s evidence is that whilst his priority is to find the next role for candidates, in this case when reviewing the available opportunities, Ms Koak did not fit any of them. He said that whilst Ms Koak was highly skilled in some areas, she did not have even 50% of the skills required for any of the available positions.
Mr Chua also gave evidence that it is the Respondent’s policy to prioritise finding new assignments for personnel when an assignment ends. He said that doing so also makes sense from a business perspective, because AirSwift only makes money when they have people working on assignments for clients, and Mr Chua considered the Applicant to be a highly-skilled employee. He said that clients relied on him to give them the best and most suitable candidate and he could not present Ms Koak for the available roles, even though he would love to from both a business perspective and also because Ms Koak had just lost her job.
After the dismissal, Ms Koak applied for two positions with the Respondent: a PMO Data Analyst role and a Business Process Analyst role. Mr Chua’s evidence was also that she was not suitable for these roles.
Submissions
The Respondent submits that the Applicant was engaged specifically to perform the work of the ExxonMobil Assignment. ExxonMobil terminated the assignment, as it was entitled to do under the master agreement. As a result, the role performed by the Applicant was no longer required by the Respondent to be performed by anyone due to the change in operational requirements of Airswift, because they no longer needed to provide the staffing services for the ExxonMobil Assignment. As to redeployment, the Respondent considered the Applicant for the small number of other roles it had available at the time, however the Applicant was assessed as not having even 50% of the specialised skills required. It was therefore not reasonable to redeploy the Applicant into any other role because there were no roles available that could utilise the Applicant’s skill set. The Respondent submitted that the termination of the Applicant’s employment was therefore a case of genuine redundancy.
On one view, as a casual employee of a labour hire employer with no guarantee of hours, it is not uncommon to have gaps in between assignments with clients, and there was no need to terminate Ms Koak’s employment. However, the Respondent took the view that Ms Koak was employed specifically for the assignment with ExxonMobil.
The Applicant contends that a contract was entered into on 28 March 2023 when the position was verbally offered and accepted, with the daily rate having been agreed. Consistent with the description of the role as a 12-month position, the contract was for a 12-month fixed term. The subsequent written contract which specified that it was a casual engagement was therefore of no legal effect.
Alternatively, the Applicant submits that it was not a case of genuine redundancy because the Respondent failed to consider redeployment, particularly in light of the recent Full Court of the Federal Court decision in Helensburgh Coal Pty Ltd v Bartley[13] where the Full Court said:
63.The applicant’s contention to the contrary was undermined somewhat by its concession during the hearing—properly given, we add—that s 389(2) of the FW Act might be understood to contemplate that dismissals will not amount to “case[s] of genuine redundancy” in circumstances where employees could be maintained in their employment for a short period if that would obviate the need for dismissal. With respect, that must be right. There is no reason to think that s 389(2) could not cover circumstances in which an employer dismisses employees on operational grounds where those employees could be redeployed to positions which are not currently available but are about to become available, for example, where it knows that other employees are soon to retire or that a contract with a third party for the performance of work is soon to expire.
64.A similar analysis would apply to an employer who preferred dismissal over retraining. If, in a given case, there is a position to which an otherwise redundant employee might be redeployed; but for which he or she is unqualified for want of appropriate training, the possibility that he or she might undertake that training (and, thereby, obtain that qualification) is a circumstance that is apt to inform whether the alternative of dismissal would qualify as “a case of genuine redundancy”. The fact that there might be some barrier that makes redeployment more difficult or more involved than it otherwise could be—whether that barrier takes the form of a need for retraining or, as here, the pre‑existing occupation of roles by contractors—is not to the point. Whether redeployment “would have been reasonable in all [of] the circumstances” requires analysis of what an employer could have done apart from dismissing the employee.
65.That being so, the immediate unavailability of a position to which a redundant employee could conveniently have been redeployed does not necessarily inoculate an employer against a charge that a dismissal was “not a case of genuine redundancy”. Naturally, it is a circumstance that, in any given case, might well favour a conclusion that redeployment would not have been reasonable. Whether that is so, however, will depend upon “all [of] the circumstances”.
66.It is for the FWC, as a specialist statutory tribunal, to determine whether redeployment would have been reasonable in any given case. Within the wide bounds of what is legally reasonable, that assessment is to be made having regard to such matters as the FWC thinks are apt to assist it. If, in a given case, there is reason to think that an employer could have taken steps that would have enabled redeployment in preference to dismissal, that possibility may fairly be brought to bear upon the FWC’s assessment of what “would have been reasonable in all [of] the circumstances”.
The Applicant also submitted that it could not be a case of genuine redundancy because the Respondent was ignorant of the reason ExxonMobil terminated the assignment. The Applicant submitted that a labour hire employer who could claim a redundancy when a client exercises a right to terminate an assignment, would be a “backdoor way to achieve what the Commission decided against in Kool v Adecco Industrial Pty Ltd T/A Adecco’.[14] Kool v Adecco and similar cases have found that it is no defence to a claim of unfair dismissal by a labour hire employer to simply, without more, rely on complying with a direction of its client to terminate the employment of an employee on assignment. In Kool v Adecco, Deputy President Asbury (as she then was) said:
[49] However, the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal. Labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly. If actions and their consequences for an employee would be found to be unfair if carried out by the labour hire company directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship. If the Commission considers that a dismissal is unfair in all of the circumstances, it can be no defence that the employer was complying with the direction of another entity in effecting the dismissal. To hold otherwise would effectively allow labour hire employers to contract out of legislative provisions dealing with unfair dismissal. (underling added)
…
[72] If I accept Ms Coyne’s witness statement as being a true and correct version of events, it is apparent that Ms Coyne simply acquiesced in the removal of Ms Kool from the Nestle site in circumstances where she had no independent view that there was any issue with Ms Kool’s capacity or conduct. There is no evidence of any independent attempt on the part of Ms Coyne or any Adecco manager, to verify whether there was a valid reason for the removal of Ms Kool from the Nestle site, in circumstances where Ms Coyne’s statement makes it clear that Ms Coyne knew that the reason for Ms Kool being removed from the site was allegations about her conduct. I do not accept that Adecco has established that there was a lack of alternative placements for Ms Kool or that she unreasonably refused an alternative placement so that it could be said that this constituted a valid reason for dismissal.
[73] Accordingly I am satisfied and find that there was no valid reason for Ms Kool’s dismissal related to her capacity or conduct.
Consideration
For a dismissal to be a genuine redundancy under s.389 of the Fair Work Act 2009 (Cth) (the Act), the dismissal has to be because 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 and the employer must have complied with any obligations in a modern award or enterprise agreement to consult about the redundancy. It will not be a genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity.
In relation to redeployment, the alternative position must be suitable in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining.[15]
I reject the submission that a 12-month fixed term contract was entered into on 28 March 2023. Having regard to all the evidence, I accept Mr Chua’s evidence that he advised Ms Koak that the role was a casual position. His evidence on that point was clear, consistent with the Respondent’s practice and operations, and Ms Koak conceded that it was possible he had done so. It is also consistent with the subsequent actions of both parties, including the specific terms of the written contract subsequently provided and that the Applicant at no time prior to the termination, raised a concern as to why the contract and payslips were on a basis other than what she had agreed to. Even if a 12-month contract was entered into on 28 March 2023, the subsequent actions of the Respondent in providing a casual contract and paying on that basis would likely either constitute a repudiatory breach that the Applicant affirmed by continuing to perform the contract with no question, or that a new contract was entered into upon the signing of the written on-hire casual contract. I find that the contract between the parties was for a casual position for a maximum term of 12 months for the specific purpose of the assignment with ExxonMobil.
I am satisfied that the Respondent no longer required Ms Koak’s position to be performed by anyone because she had been engaged to undertake the particular assignment with ExxonMobil, and its operational requirements changed when the client terminated the assignment and AirSwift was not required to provide labour as a result. Whilst initially pursued, the Applicant acknowledged during the hearing that in the circumstances there was no obligation to consult under the award that applied.
In many cases involving labour hire, a casual employee’s employment is not terminated when an assignment ends and as found in Kool v Adecco, a labour hire employer cannot simply rely on the exercise of a client’s contractual right to terminate the assignment to it of a particular employee, to justify dismissing that employee. There must be a valid reason for the dismissal. However, in this case, information technology was a new and small part of the Respondent’s business, Ms Koak was employed specifically for the role at ExxonMobil and there were no other suitable alternative roles. That specific role ended when the assignment was terminated. I am satisfied that AirSwift has established that there was a lack of alternative placements for Ms Koak. In this sense, the circumstances involved in the present case are not analogous with the circumstances in Kool v Adecco.
Ms Koak’s circumstances are more analogous to those considered in Pettifer v MODEC Management Services Pty Ltd,[16] where the Full Bench held on appeal that:
“MODEC was therefore contractually obligated to remove Mr Pettifer from the BHPB Site if instructed to do so. This was the role which Mr Pettifer was employed to perform. No longer capable of performing the inherent functions of this role, MODEC sought to find alternative employment for Mr Pettifer. Only after exhausting these inquiries did MODEC rely on this reason to terminate Mr Pettifer’s employment. In these circumstances the Full Bench is satisfied that MODEC had a valid reason relating to Mr Pettifer’s capacity to terminate his employment and only exercised this reason because it genuinely was unable to find suitable employment for him.”
As to redeployment, whilst Mr Chua’s assessment of other opportunities suitable for the applicant was quick, taking less than one hour, in all the circumstances I am satisfied that this was sufficient time. As the Respondent is relatively new to the information technology area, it does not have the breadth and depth of roles existing in other parts of the business. At that point there was only a small number of available positions and whilst Ms Koak was rated highly by Mr Chua in relation to her specific skills and experience, his assessment was that she had less than 50% of the required skills for the few available roles. Given this, I am satisfied that the need for retraining was such that it was not reasonable to redeploy the Applicant into any of the available roles and that there were no roles available that could utilise the Applicant’s skill set.
The termination of the Applicant’s employment was a case of genuine redundancy. It is therefore not an unfair dismissal. The application is dismissed. An order to that effect will be issued.
DEPUTY PRESIDENT
Appearances:
G. Dircks of Just Relations, with permission on behalf of the Applicant.
N. Visedo of Citation Group, with permission on behalf of the Respondent.
Hearing details:
2024
April 17
[1] Transcript PN199.
[2] Witness Statement of Ms Koak, Exhibit SK3; Hearing Book (“HB”) p.50-55.
[3] Ibid, Exhibit SK4; HB p.56.
[4] Witness Statement of Mr Chua at [9-11]; HB p.191.
[5] Supplementary Witness Statement of Ms Koak at [3], Transcript PN57.
[6] Supplementary Witness Statement of Ms Koak at [4].
[7] Witness Statement of Ms Coen at [12], Exhibit ACN-1; HB p.198-223.
[8] Ibid.
[9] Ibid.
[10] Witness Statement of Ms Koak, Exhibit SK1; HB p.30-48.
[11] Witness Statement of Ms Coen at [26].
[12] Transcript PN286-296.
[13] [2024] FCAFC 45 at [63]-[66].
[14] Applicant’s Further Submissions in Reply dated 3 April 2024; Kool v Adecco Industrial Pty Ltd T/A Adecco [2016] FWC 925 (“Kool v Adecco”); adopted in Full Bench decisions e.g. Spinifex Australia Pty Ltd T/A Spinifex Recruiting the Patrice Tait [2018] FWCFB 6267.
[15] Ulan Coal Mines Limited v Honeysett & Ors[2010] FWAFB 7578.
[16] [2016] FWCFB 5243 at [37].
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