Tracey Harbud v Australian Commercial Catering

[2013] FWC 2625

[2013] FWC 2625

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tracey Harbud
v
Australian Commercial Catering
(U2012/16482)

COMMISSIONER RYAN MELBOURNE, 3 JULY 2013

Termination of employment - jurisdictional objection - genuine redundancy.

[1] This decision relates to the application of Ms Tracey Harbud for relief in relation to termination of her employment with Australian Commercial Catering (ACC) under s.394 of the Fair Work Act 2009 (the Act).

[2] This matter was subject to a hearing before me on 16 April 2013. Mr Garry Dircks was granted permission to appear on behalf of Ms Harbud and Mr Peter Darmos, Managing Director, represented ACC.

[3] Ms Harbud was employed as a casual food and beverage attendant at the Yarra Valley Water site where ACC held the tender for provision of catering services from 27 October 2011.

[4] On 11 December 2011 Ms Harbud’s employment was converted to full-time.

[5] On 12 November 2012 Ms Harbud suffered an injury to her right forearm when undertaking her duties and as a result was off work from 13 November 2012.

[6] On 30 November 2012 Ms Harbud received clearance from her doctor to return to work on light duties and she sent a text message to that effect to the HR Manager, Ms Nicole Mighell.

[7] Ms Mighell advised Ms Harbud that there was no job for her at the Yarra Water site but there was available work at the Coles Atrium site in Tooronga.

[8] On Sunday 2 December 2012 Ms Harbud advised Ms Mighell that she declined the proposed transfer to the Coles Atrium site. Ms Mighell agreed to pay Ms Harbud a redundancy payment and the employment relationship ended on 3 December 2012.

[9] On 26 December 2012 Ms Harbud submitted a WorkCover claim for the injury suffered on 12 November 2012.

Initial Matters to be Considered

[10] During the hearing on 16 April 2013 the Commission made findings in relation to the matters specified in s396(a), (b) and (c). 1

Section 396(c) - genuine redundancy

[11] The initial matter to be decided is whether or not the dismissal was a genuine redundancy. Section 385(d) of the Act provides that if I am satisfied that the dismissal is a genuine redundancy then it cannot be an unfair dismissal. Section 385 of the Act provides as follows:

“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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[12] The relevant statutory provisions which determine when a dismissal will be a case of genuine redundancy are set out in section 389 of the Act as follows.

“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.

[13] Mr Dircks in his outline of submissions addressed s.389(1) and (2) of the Act.

[14] He contended that ACC did require someone to perform the duties which were being performed by Ms Harbud prior to her going on leave as another person, Emma, was moved into her role; and that there had been no consultation regarding the redundancy as per clause 8 of the Hospitality Industry (General) Award 2010 and that therefore this was not a case of genuine redundancy.

Did Ms Harbud’s employer no longer require Ms Harbud’s job to be performed by anyone because of operational requirements of the employer’s enterprise (s.391(1)(a))?

[15] The job performed by Ms Harbud was that of a Food and Beverage Attendant at the Yarra Valley Water site of ACC. Part of the duties of Ms Harbud involved the pushing or pulling of a trolley around the site primarily carrying milk to stock the several kitchenettes around the site. It was the pushing and pulling of this trolley which caused Ms Harbud to suffer an injury on 12 November 2012.

[16] Whilst Ms Harbud was off work due to her injury the task of pushing and pulling the trolley around the site was performed by another employee, Emma, and other duties of Ms Harbud were performed by other employees.

[17] In August 2012 ACC decided to employ a barista at the Yarra Valley Water site after many customer complaints about the quality of the coffee. Emma was transferred from the Coles Atrium site to the Yarra Valley Water site as the barista. In employing Emma at the Yarra Valley Water site ACC did so on the basis that Emma was additional to the number of employees required at that site but where ACC considered that if sales picked up then the site could afford to carry an additional employee. Prior to August the staffing at the Yarra Valley Water site was 5: a chef, a team leader, a fulltime food and beverage attendant and 2 casual food and beverage attendants. Adding a barista took the staff numbers to 6.

[18] Whilst Ms Harbud was off work with a workplace injury the number of employees at the Yarra Valley Water site returned to 5 being the number that were there before Emma had been added as an extra employee.

[19] The decision by ACC not to allow Ms Harbud to return to work at the Yarra Valley Water site was described by Ms Mighell as occurring on 30 November 2012 after Ms Harbud advised Ms Mighell that Ms Harbud had been cleared by her doctor to return to work with restrictions:

“Ms Mighell: Tracey sent me a text message. I rang Mr Craven to say, “Tracey is fit to work. Have you made a decision?” He said, “We can’t afford the hours anymore.”---I said, “Fine, then I will look for something else so I can help her return to work.”  2

[20] Mr Craven, as the Operations Manager of ACC, made the decision that Ms Harbud not be returned to the Yarra Valley Water site. As the evidence of Ms Mighell makes clear  3the reason for Ms Harbud not being returned to work at the Yarra Valley Water site was financial and not in relation to her workplace injury.

[21] The decision of Mr Craven not to permit Ms Harbud to return to the Yarra Valley Water site was a decision that ACC no longer required Ms Harbud’s job to be performed by anyone because of changes in the operational requirements of ACC’s enterprise.

[22] Ms Harbud contended that all the duties of the job that she had been performing were still required to be performed by ACC. This is true in one sense. Prior to Ms Harbud suffering a workplace injury there were 6 persons performing all of the work that ACC needed to be performed at the Yarra Valley Water site. After Ms Harbud suffered a workplace injury the work of the 6 employees was reallocated so that is was now performed by 5 employees. All of the elements that made up the job of Ms Harbud were still being performed by employees of ACC at the Yarra Valley Water site but the job of Ms Harbud was no longer required.

[23] A job can be made redundant through the reallocation of the individual elements of the job to other employees.

[24] In Ulan Coal Mines Limited v Howarth and others, a Full Bench of Fair Work Australia said:

“[15] These were the circumstances in which it was necessary to consider the meaning and application of the relevant statutory provisions and, in particular, the expression “the person’s employer no longer required the person’s job to be performed by anyone” in s.389(1)(a) of the Act. These words have long been used and applied in industrial tribunals and courts as a practical definition of redundancy (see e.g. R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Cooperative Limited (1977) 16 SASR 6; Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115; Short v F.W. Hercus Pty Limited (1993) 40 FCR 511). They have also been adopted in the National Employment Standards provided under the Act in dealing with entitlements to redundancy payments (see s.119).

[16] The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will 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.’

[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 Ms Harbud 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 Ms Harbud still exists.’
(at par [27])”  4

[25] In his final oral submissions Mr Dircks for Ms Harbud contended, in relation to the Ulan Coals decision “that's taking it one step too far to say that section 389(1)(a) would be met in this case where there is no doubt that all that has happened is that Emma has taken over Ms Harbud's role while she was off injured.”  5

[26] The evidence however is that Mr Craven decided that Ms Harbud could not be reemployed at the Yarra Valley Water site because ACC could not afford to employ 6 persons at the site.

[27] It is clear on the evidence that the job of Ms Harbud was no longer required to be performed by anyone because of changes in the operational requirements of ACC’s enterprise at the Yarra Valley Water site.

[28] This finding only addresses the matter raised by s.389(1)(a) and I now turn the matter raised by s.389(1)(b)

[29] The Hospitality Industry (General) Award 2010 covered Ms Harbud and ACC in relation to the work performed by Ms Harbud. The Award contains a consultation clause in the following terms:

“8. Consultation regarding major workplace change

8.1 Employer to notify

(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b) Significant effects include termination of employment, major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

8.2 Employer to discuss change

(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1.

(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

[30] The decision of Mr Craven not to permit Ms Harbud to return to work at the Yarra Valley Water site clearly meets the definition of “significant effects’ in clause 8.1(b) of the Award. Therefore ACC had an obligation under clause 8.2(a) of the Award to discuss with Ms Harbud both the effects of Mr Craven’s decision and measures to avert or mitigate any adverse effects of Mr Craven’s decision, and such discussion had to commence as early as practicable after Mr Craven made his decision.

[31] The evidence of Ms Mighell is that once she knew Mr Craven’s decision she communicated the decision to Ms Harbud and offered Ms Harbud employment at the Coles Atrium site in Tooronga. It is also clear that the possibility of relocation of Ms Harbud to the Bosch site was also discussed as was the possibility of a redundancy payment if nothing worked out.

[32] Whilst a discussion occurred between Ms Harbud and Ms Mighell it is clear on the evidence of Ms Mighell that the requirements of clause 8.2(c) were not complied with. All information given to Ms Harbud in relation to the change in the employment structure at the Yarra Valley Water site and the effect of those changes on Ms Harbud including the proposed transfer to the Coles Atrium site were only communicated to Ms Harbud verbally and were not communicated in writing as required by clause 8.2(c) of the Award.

[33] Non compliance with clause 8.2(c) of the Award means that ACC did not satisfy the requirement of s.389(1)(b) of the Act and this necessarily means that ACC has not met the obligation in s.389(1)(b) of the Act. The consequence flowing from this is that dismissal of Ms Harbud cannot be a case of a genuine redundancy within the meaning of s.389 of the Act.

[34] Having determined each of the initial matters, other than s.385(a), required to be considered before the merits of the application can be considered I now turn to both s.387 and s.385(a) of the Act.

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that FWA considers relevant.”

[35] In considering the criteria in s.387 I am required to consider each criteria which is relevant and only those criteria which are relevant.  6

Was there a valid reason relating to Ms Harbud’s capacity or conduct? (s.387(a))

[36] The dismissal did not relate to Ms Harbud’s capacity or conduct, so this matter is not relevant to my consideration.

Notification and opportunity to respond (ss.387(b) and (c))

[37] Given the specific link between these two criteria and the criteria in s.387(a) it is clear that neither of these two criteria are relevant in this matter.

Support person (s.387(d))

[38] There was no unreasonable refusal by the employer to allow Ms Harbud to have a support person present to assist at any discussions relating to the dismissal. In fact the speed with which the discussions took place meant that at no stage did ACC offer Ms Harbud an opportunity to have a support person present.

Unsatisfactory performance (s.387(e))

[39] The dismissal did not relate to unsatisfactory performance, so this matter is not relevant to my consideration.

Size of the enterprise and human resource management (s.387(f) and (g))

[40] These two factors are relevant. ACC did have dedicated human resource expertise available. The failure of ACC to separate the redundancy of Ms Harbud’s job at the Yarra Valley Water site with the issue of managing a return to work of Ms Harbud after her workplace injury tends to support a finding of an unfair dismissal. The evidence of Ms Mighell was that Ms Harbud had two separate files on Ms Harbud: one was a general personnel file and the other was a WorkCover file. The fact that the Human Resource expertise provided by Ms Mighell was sufficient to enable ACC to keep WorkCover and other HR matters separated in the filing system suggests that ACC could have separated the issue of redundancy of job from the issue of return to work.

Other matters (s.387(h))

[41] I have already determined that the dismissal was not a genuine redundancy within the meaning of s.389 of the Act given that ACC did not comply with the requirements of s.389(1)(b) by not putting the required information in writing as required by clause 8.2 of the Award. However I consider that the redundancy of Ms Harbud’s job and the actions of ACC and of Ms Harbud in relation to that redundancy are relevant matters in considering whether the dismissal was an unfair dismissal.

[42] It is clear from the evidence of both Ms Harbud and Ms Mighell that once Mr Craven made the decision that Ms Harbud could not return to work at the Yarra Valley Water site due to financial reasons that Ms Mighell and Ms Harbud did discuss alternatives. I accept the evidence of Ms Mighell that the proposed transfer to the Coles Atrium site at Tooronga provided the most supportive work environment for Ms Harbud in her return to work after having suffered a workplace injury. Whilst Ms Mighell proposed relocation to the Coles Atrium site in Tooronga Ms Harbud considered this to be unacceptable due to extra travel time and increased travel costs. It is clear that Ms Mighell did not try to force the relocation upon Ms Harbud and that Ms Mighell accepted that if the relocation was unacceptable to Ms Harbud then Ms Harbud would be entitled to a redundancy payment and the employment relationship would be ended.

[43] There is nothing in the evidence of Ms Mighell which would allow for any finding other than that Ms Mighell was the decision maker in relation to the decision to terminate the employment relationship with Ms Harbud. The dismissal was at the initiative of the employer and so meets the test in s.386(1)(a) and for the purposes of s.385(a) I find that Ms Harbud was dismissed. Having said that it is also clear from the evidence that Ms Harbud accepted that termination of the employment relationship with a redundancy payment was a better option than relocation to the Coles Atrium site in Tooronga.

[44] ACC paid to Ms Harbud both payment in lieu of notice and the redundancy payment required under the Act, a sum of 6 weeks pay in total. I also note that Ms Harbud continued to receive WorkCover payments until 24 March 2013.

Conclusion

[45] There are only three criteria under s.387 which are relevant, namely s.387(f), (g) and (h).

[46] The combined operation of s.387(f) and (g) weigh in favour of a finding that the dismissal was harsh, unjust or unreasonable. However the relevant matters considered under the criteria of s.387(h) weigh much more strongly in favour of a finding that the dismissal was neither harsh nor unjust nor unreasonable. On balance I am satisfied that the dismissal in this matter was not harsh, unjust or unreasonable.

[47] The application is dismissed.

COMMISSIONER

Appearances:

G. Dircks for Ms Harbud

P. Darmos for ACC.

Hearing details:

2012.

Melbourne:

April 16

 1   Transcript PN942-952

 2   Transcript PN824 and 825

 3   Transcript PN792

 4   Ulan Coal Mines Limited v Howarth and others[2010] FWAFB 3488 at paras [15] - [18]

 5   Transcript PN989

 6   Sayer v Melsteel P/L, [2011] FWAFB 7498 at pars [14] and [20] and Chubb Security Australia P/L v Thomas, Print S2679 at pn41

Printed by authority of the Commonwealth Government Printer

<Price code C, PR536118>