Tracey Roberts v Biniris (Aust) Pty Ltd

[2012] FWA 10508

[2012] FWA 10508

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tracey Roberts
v
Biniris (Aust) Pty Ltd
(U2012/10024)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 13 DECEMBER 2012

Termination of employment - jurisdiction genuine redundancy - compliance with award consultation requirements.

[1] On 19 October 2012 Ms Roberts lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act), through which she sought relief with respect to the termination of her employment with Biniris (Australia) Pty Ltd (Biniris) on 8 October 2012.

[2] Biniris objected to the application and sought that it be dismissed on the ground that the termination of Ms Roberts’ employment was a genuine redundancy.

[3] Section 396 identifies four initial issues about which Fair Work Australia (FWA) must be satisfied before the merits of an application can be considered. There is no dispute that the application was made within time, that Ms Roberts was protected from unfair dismissal and that Biniris is not a small business. This means that the only initial issue in dispute goes to the question of whether the termination of Ms Roberts’ employment was a genuine redundancy.

[4] This issue was the subject of a hearing in Adelaide on 5 December 2012. At that hearing Ms Roberts was represented by Mr Labropoulos of United Voice and Biniris by its General Manager, Mr King. For the sake of completeness I note that on 3 December 2012 the legal practice which had prepared the Biniris outline of submissions and witness statements requested an adjournment of this hearing on the basis that the lawyer involved had taken seriously ill. This request was refused. No new request for legal representation was made.

[5] At the hearing on 5 December 2012 Mr Johns, the South Australian State Manager of Biniris and Ms Brooks, the Queensland based Biniris Sustainability and Risk Manager both gave evidence. Ms Roberts gave evidence in support of her position. Various written material was provided to me. In reaching a conclusion in this matter I have considered all of the material before me.

Background

[6] The background to the application is that from November 2009 Ms Roberts worked as a cleaner for Biniris. From February 2010 she worked at the Adelaide Shores Caravan Park site (the site). The Biniris contract for this work was scheduled for expiry on 30 June 2012.

[7] Mr Johns’ evidence was that, having discussed the possibility of Biniris losing the contract with Mr King he provided the site employees with a memo on 1 June 2012 which confirmed the contract finish date and Biniris’ objective of renewing the contract. 1 At this time he met with the site employees, including Ms Roberts whom he informed that there were no alternative positions at the present time.

[8] The Biniris contract was extended on an interim basis pending finalisation of the tender process. Mr Johns’ evidence is that between 1 June and 9 October 2012 he had quite a few discussions with Ms Roberts which included references to the contract renewal process.

[9] Ms Brooks’ evidence is that she regularly engaged in communications with Ms Roberts after 1 June 2012 relative to Ms Roberts workers compensation rehabilitation programme and that in the course of various of these discussions the contract renewal issue was discussed.

[10] Biniris was formally advised that its contract would not be renewed on 8 October 2012. Mr Johns’ evidence is that he then conferred with Mr King and agreed that there were no suitable positions elsewhere within Biniris. On the morning of 9 October 2012 Mr Johns contacted the client and discussed the possibility of employment transfers of the Biniris employees. Mr Johns’ evidence is that, at that time he was not aware of who would replace Biniris but that he was aware of possible employment options elsewhere within the client’s business. The client’s position was that it would manage any employment possibilities for the Biniris employees. Later that day Mr Johns met with the site employees and informed them that Biniris had lost the contract and that their employment would be terminated on the basis of redundancy. In Ms Roberts’ case, Mr Johns provided her with a termination of employment letter signed by Ms Brooks and advised her that, given her family responsibilities, Biniris did not require her to work out her notice period but advised that she would be paid notice entitlements from that date. The termination of employment letter detailed the notice payments and redundancy payments due to Ms Roberts and indicated that she would also be paid her accrued entitlements and any outstanding pay including superannuation up to 9 October 2012.

[11] Mr Johns advised that soon after 9 October 2012 Biniris was advised that the client had not let a new contract but was instead going to undertake the work on an in-house basis.

[12] Section 385 details the circumstances under which a dismissal can be considered unfair. Ms Roberts’ dismissal cannot be regarded as unfair if it was a case of genuine redundancy. Section 389 defines a genuine redundancy in the following terms:

“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] The Biniris position is that the termination of Ms Roberts’ employment was a direct result of the loss of the cleaning contract, and that there were no viable redeployment options. Further, Biniris asserts that it met the obligations relative to redundancy that are set out in the relevant Cleaning Industry Award 2010 (the Award).

[14] Ms Roberts’ position is that Biniris did not meet its obligations under s.389(2) in that redeployment was a viable option. Secondly, that Biniris did not meet its obligations under the Cleaning Industry Award 2010 in that it did not comply with the consultation obligations set out in the Award. Ms Roberts asserts that these obligations are detailed in clauses 8, 9 and 14.

Findings

[15] On the evidence before me I am satisfied that 30 days before the specified contract expiry date Biniris provided written advice to employees on the site to this effect. Further, this advice foreshadowed the possible non-renewal of the contract. 2

[16] Ms Roberts’ evidence was that there were no further discussions or communications which involved her between 1 June 2012 and 9 October 2012. In this respect I prefer the evidence of Mr Johns and Ms Brooks. The evidence of Ms Brooks establishes her regular contact with Ms Roberts. That evidence is supported by a series of SMS communication exchanges between Ms Brooks and Ms Roberts. The exchange which occurred on 29 June 2012 specifically refers to the contract renewal process and is indicative of at least one earlier discussion between Ms Brooks and Ms Roberts.

[17] I am satisfied that Mr Johns’ position as South Australian manager meant that, in consultation with the General Manager, Mr King, enabled an assessment of the possibilities for redeployment and that this assessment was undertaken. This is clear from Mr Johns’ evidence.

[18] I have taken into account the somewhat unusual way in which Mr Johns’ notes of the meeting of 9 October 2012 have been phrased. Nevertheless, I am satisfied that the evidence does not challenge the accuracy of these notes. I am satisfied that Ms Roberts was advised that she was not required to work out her notice period which would allow her additional time to look for other employment and to contact Ms Brooks if she had any questions.

[19] I am satisfied that, whilst Mr Johns was aware of the possibility that the client would directly undertake the work previously done by Biniris, he was not formally advised of this until after 9 October 2012. I am also satisfied that, on 9 October 2012, prior to his discussion with the site employees, Mr Johns contacted the client about the possibility that the client might directly hire some of the site employees on the basis that he understood that there were roles within the client’s business that might be suitable. The evidence of Mr Johns in these respects has not been disputed.

[20] I have concluded that Ms Roberts continued to ask Ms Brooks questions about alternative employment opportunities, including Site Management roles within Biniris. Ms Brooks provided advice that Site Management roles were not available. In response to further questions from Ms Roberts, Ms Brooks provided advice on 15 October 2012 which confirmed that Biniris had been advised that there were no employment opportunities at the site.

[21] I have noted that before the termination of her employment, Ms Roberts had engaged in discussions with Ms Brooks about the possibility of being temporarily released from her work obligations so as to undertake a job placement in a different career area. I have been provided with correspondence which indicates the steps that Ms Brooks had taken to facilitate this, but do not believe it to be relevant to the termination process.

[22] The SMS exchange between Ms Brooks and Ms Roberts clearly indicates that documented advice of Ms Roberts pay and annual leave entitlements was in the process of being forwarded to her on 9 October 2012. There is no evidence that indicates that this did not occur.

[23] I have considered the definition of a genuine redundancy 3 in the context of the facts before me.

[24] Ms Roberts’ employment was terminated because Biniris lost the site contract. That contract loss eliminated the scope for any Biniris employee to undertake the work previously performed at the site. The termination of Ms Roberts’ employment meets the general requirements of s.389(1)(a).

[25] In terms of s.389(1)(b) I have considered the relevant provisions of the Cleaning Services Award. Three clauses have potential relevance. Clause 14 “Redundancy” relevantly states:

“14.5 Change of contract

(a) This clause applies in addition to clause 9—Consultation regarding change of contract and section 120(1)(b)(i) of the Act and applies on the change of a cleaning contract from one cleaning contractor (the outgoing contractor) to another (the incoming contractor).

(b) Section 119 of the Act does not apply to an employee of the outgoing contractor where:

(i) the employee of the outgoing contractor agrees to other acceptable employment with the incoming contractor, and

(ii) the outgoing contractor has paid to the employee all of the employee’s accrued statutory and award entitlements on termination of the employee’s employment.

(c) To avoid doubt, section 119 of the Act does apply to an employee of an outgoing contractor where the employee is not offered acceptable employment with either the outgoing contractor or the incoming contractor.”

[26] Clause 9 states:

“9. Consultation regarding change of contract

In addition to clause 8—Consultation regarding major workplace change, where a decision is made by an employer to relinquish a cleaning contract, or a decision is made by a principal that is likely to bring about a change of contract, the following will apply:

9.1 The employer is required to notify employees 28 days, or as soon as practicable, before an existing cleaning contract is due to expire, or when the employer has been notified that the contract has been terminated.

9.2 The notification to employees must be in writing, containing options (if any) for suitable alternative employment for employees with the employer in the event that the contract is terminated. The employer must notify those employees who are to be offered suitable alternative employment, identify the site, the hours of work and the rates of pay proposed. The employer must provide to the successful tenderer a list of employees who have given permission for their details to be so provided and who wish to be considered for employment by the incoming contractor.

9.3 Employees who are not offered suitable alternative employment with their employer must be notified in writing by their employer, and the notice must contain details of the employee’s entitlements (including accrued annual leave) and a statement of service (including length of service, hours of work, classification and shift configuration).

9.4 The employer must facilitate a meeting between the incoming contractor and outgoing employees who are not offered suitable alternative employment with the employer.

[27] Clause 8 is the more general consultation provision. This states:

“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 representative or 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.”

[28] The reference in s389(1)(b) to compliance with award consultation obligations relative to redundancy most logically refers to clause 14 which in turn directs attention to clause 9. Clause 9 must be read in addition to clause 8. I have firstly addressed the obligations in clause 8.

[29] In this respect I do not consider clause 8 can be readily applied to this situation. It is clear that Biniris did not propose to introduce major changes in its production, program, organisation, structure or technology. It simply sought to secure the new contract. The decision to not let that contract to Biniris was made by the client. Because the Award deals specifically with a change of contract circumstance in clause 9 it appears to me that, in a circumstance where Biniris had established that there were no redeployment opportunities, and the imminent contract loss had been confirmed, there would be little point in engaging in a discussion with the employees about what they wanted when there were simply no other alternatives to redundancy. In the situation confronting Biniris when it was advised that it had lost the contract, I consider that the discussions which Mr Johns promptly convened with the affected employees, met the requirements of clause 8. I note that there is no suggestion that any employee requested the involvement of a representative in discussions with Biniris management.

[30] In terms of clause 9 of the Award, I am satisfied that Biniris notified the site employees more than 28 days before the contract was due to expire. The 1 June 2012 advice referred to a “loss of contract” situation. The day after Biniris was advised that it had lost the contract, it met with and then provided written advice to Ms Roberts 4. I have concluded that this notice of termination of employment met the requirements of clause 9.2 in that it did not specify options other than termination of employment because there were no such options. Further, on the day after Biniris was advised of the loss of contract Mr Johns spoke with the client and sought to procure employment for the displaced employees. Again, I consider this to be consistent with the requirements of clause 9.2.

[31] The requirement in clause 9.3 for the inclusion in “the notice” of details of Ms Roberts entitlements (including accrued annual leave) and a statement of service (including links of service, hours of work, classification and shift configuration) is, in my view, intended to ensure that employees receive this advice in a timely fashion. However, the specific requirements of this clause in terms of “the notice” must refer to the notification referenced in clause 9.2. Whilst I do not understand that there is any dispute that Ms Roberts received that information, simply put, it was not included in the written advice provided to her on 9 October 2012. In this respect, I consider the Award provisions to be overtly prescriptive. If a purposive approach to compliance with clause 9.3 was available to me I would have adopted it as I consider that, on the material before me, Biniris complied with the intention of the Award. However, the combination of the specific requirements in the FW Act and the prescriptive provisions of clause 9 of the Award mean that there is no alternative conclusion available, apart from a conclusion that the relevant Award obligation has not been met in its entirety.

[32] For the sake of completeness I note that clause 9.4 and, for that matter, the provisions of clause 14 are not relevant to this circumstance.

[33] In terms of s.389(2) I have concluded that the evidence of Mr Johns establishes that, after it had lost the site contract, Biniris had three other cleaning contract sites in South Australia 5 and that there were no available suitable positions within Biniris. Nothing to contradict this evidence has been put to me. Accordingly, I am satisfied that s.389(2) does not apply in this situation.

Conclusion

[34] I have concluded that the termination of Ms Roberts’ employment was substantially a case of genuine redundancy. However, it cannot be described as such because Biniris did not fully comply with the prescriptive Award provisions relative to consultation about the redundancy.

[35] This means that the Biniris motion to have the application dismissed on the ground that the termination of Ms Roberts employment could not be considered unfair because it was a genuine redundancy must fail. The application will be listed for consideration on the merits shortly.

[36] I refer the parties to the decision in Maswan v Escada Texilvertrieb T/A Escada 6 where Watson VP observed:

“[39] In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But as it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred.”

[37] Some care should be taken in this respect. There is nothing before me which indicates inherent unfairness in the termination of Ms Roberts’ employment or, for that matter, in the payments made to her when she was made redundant. The application should only be pursued at this point if Ms Roberts has grounds upon which she can establish that her dismissal was harsh, unjust or unreasonable. In this respect the position which has been foreshadowed, to the effect that Biniris’ loss of the contract could not give rise to a valid reason for the termination of Ms Roberts’ employment because it was not related to her capacity or conduct, cannot be a sustainable position unless it is supported by evidence of unfairness. Should the application proceed further, and that is entirely a matter for the applicant, the applicant must be able to put evidence before the tribunal that her dismissal was harsh, unjust or unreasonable and I encourage the applicant and her representative to consider that essential requirement.

[38] An order (PR532351) giving effect to this decision will be issued.

SENIOR DEPUTY PRESIDENT

Appearances:

P Labropoulos of United Voice for the applicant.

P King for the respondent.

2012.

Adelaide:

December 5.

 1   Exhibit B2, Attachment BMJ1

 2   Ibid

 3   Secion 389, Fair Work Act 2009

 4   Exhibit B2, Attachment BMJ2

 5   Exhibit B2, para 11

 6   [2011] FWA 4239

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