Weiping Kostenko v Flinders University of South Australia

[2014] FWCFB 526

[2013] FWC 7675 Note: An appeal pursuant to s.604 (C2013/6478) was lodged against this decision - refer to Full Bench decision dated 11 April 2014 [[2014] FWCFB 526] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Weiping Kostenko
v
Flinders University of South Australia
(U2013/1689)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 3 OCTOBER 2013

Application for unfair dismissal relief - person protected from unfair dismissal - genuine redundancy criteria - termination of employment secondment agreement - harsh, unjust or unreasonable.

[1] On 22 May 2013 Ms Kostenko lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of her employment with Flinders University (the University).

[2] The application was not resolved through the Fair Work Commission (FWC) conciliation process and was referred to me for determination. It was the subject of a hearing in Adelaide with telephone and video links to Perth, Melbourne and Alice Springs on 26 and 27 August and 4 and 9 September 2013. In this hearing Ms Kostenko represented herself and the University was represented by Ms Pugsley of the Australian Higher Education Industrial Association.

[3] Having considered all of the evidence in this matter, I have set out the background to the application.

[4] Ninti One is based in Alice Springs and is a provider of services to Aboriginal and Torres Strait Islander people. These services include the undertaking of research into the best manner of delivery of community services and social opportunities. Ninti One is, amongst other things, responsible for a collaborative research project known as "The Interplay between Education, Employment, Health and Well-being for Aboriginal and Torres Strait Islander People in Remote Australia" (the Interplay Project). Funding for this project has been provided to Ninti One which has entered into a formal partnership agreement with the University to provide expertise and personnel to supplement its own staff working on the Interplay Project. Under the terms of this partnership agreement Ninti One agreed to meet the employment costs of specified University personnel engaged to work on the Interplay Project. Specific secondment agreements were entered into, including an agreement applicable to Ms Kostenko. The “Secondment Agreement between Ninti One Limited and Flinders University in relation to Dr Weiping Kostenko” (the Secondment Agreement) sets out Ms Kostenko’s duties and the functions of the University and Ninti One. The Agreement is signed by the University and Ninti One. In this Secondment Agreement, Ms Kostenko is referred to as the “Secondee”. The role of Ninti One relative to Ms Kostenko's employment was governed by the Secondment Agreement. 1 Whilst Flinders University paid Ms Kostenko,2 Ninti One was required to reimburse Flinders University for specified salary and superannuation and other costs.3 The amount of that reimbursement is set out in Schedule 1 of the Secondment Agreement4 and represents the entirety of Ms Kostenko’s salary plus specified on-costs. I note that Ms Kostenko signed the Secondment Agreement5 on the basis that she acknowledged the secondment responsibilities and objectives. Further, the Secondment Agreement6 detailed the specific duties to be undertaken by Ms Kostenko as data analyst engaged on the Interplay Project.

[5] Ms Kostenko was engaged under a contract with the University which specifically referenced the Interplay Project (the Employment Contract). This contract was signed on the date Ms Kostenko commenced employment, 30 July 2012. The contract referenced Ms Kostenko as an employee on a fixed term basis under the Flinders University Enterprise Agreement 2010 to 2013 (the Enterprise Agreement). The duration of the Employment Contract was specified in the following terms: 7

“Term and Mode of Appointment

This appointment is available immediately on a fixed-term basis for five years or until such time as the grant is unable to fund the position, whichever is the earlier. This fixed-term appointment does not carry any entitlement to further employment.”

[6] Ms Kostenko worked and resided in Alice Springs for the duration of her employment with the University. In early 2013 issues arose relative to her behaviour toward her manager, the project and other staff. The extent and cause of these incidents are matters in dispute. Dr Cairney referred these issues to Professor Wakerman. The Professor engaged in discussions with Ms Kostenko. The extent to which these discussions, which occurred on a number of dates, should be regarded as appropriate or fair, or as preliminary disciplinary procedures under the terms of the Enterprise Agreement, is in dispute.

[7] On 24 April 2013 Ninti One advised the University by e-mail 8 that it had significant concerns about Ms Kostenko’s behaviour and requested that she be immediately removed from contact with Interplay Project personnel. Ninti One also advised that it proposed to immediately restructure the Interplay Project and terminate the secondment agreement applicable to Ms Kostenko. The reasons for this decision are disputed.

[8] On 29 April 2013 Professor Wakerman met with Ms Kostenko and advised her that Ninti One had expressed concern about the Interplay Project meeting its objectives, and that he was seeking legal and human resource advice from the University and would discuss the matter further with her when that advice had been received. 9 The Professor was subsequently advised by the Human Resources Department and the University's Office of Research, that the University could no longer employ Ms Kostenko without the requisite grant funding which was provided for under the Secondment Agreement.10

[9] Ninti One provided formal written advice of its decision to terminate the secondment agreement applicable to Ms Kostenko on 8 May 2013. On that same day the Professor advised Ms Kostenko that her employment with the University would be terminated. Ms Gates participated in this discussion by telephone. The Professor advised that a formal termination letter would be forwarded to Ms Kostenko.

[10] On 10 May 2013 Professor Wakerman advised Ms Kostenko that her termination date would be 17 May 2013 and that an advice would be provided to her later on that day. That written advice 11 was subsequently provided to Ms Kostenko. It advised that Ms Kostenko would be paid to 28 June 2013.

[11] Section 396 of the FW Act requires that I address a number of specified initial matters before considering the merits of Ms Kostenko's application. In this respect, I am satisfied that the application was lodged within the statutory time limit. I am similarly satisfied that the University is not a small business. Whilst I am satisfied that Ms Kostenko was a person protected from unfair dismissal, her submissions and certain assertions made by her make it appropriate that I make findings about her employment standing. Further, the circumstances of the termination of Ms Kostenko's employment are such that I have also considered whether that termination was a case of genuine redundancy. Whilst I have considered these issues in advance of the merits of her claim, this has required consideration of all of the evidence put to me in this matter.

[12] That evidence, although extensive, can be briefly summarised. Ms K gave extensive evidence about her employment, the work she undertook and issues that arose in the course of her employment. This evidence went to her concerns about the manner and basis for her dismissal, its effect on her and the remedy she sought. It is appropriate that I record that I found Ms Kostenko’s behaviour in these proceedings frequently inappropriate. Whilst Ms Kostenko may have intended to simply be assertive, she was rude toward various witnesses and frequently failed to comply with my requests to allow either myself, or witnesses to make uninterrupted statements. Ms Kostenko was given the opportunity, in the course of her initial evidence to provide additional evidence in response to the material provided by the University. She declined to do so but then sought to engage in sometimes volatile arguments with witnesses. Because I was concerned that Ms Kostenko may not have understood the normal hearing processes, I provided her with a further opportunity to provide evidence at the conclusion of the University’s evidentiary case. I have taken this additional evidence into account in reaching my conclusions relative to the application.

[13] Professor Wakerman is an employee of Flinders University and has overall responsibility for the University's participation in the Interplay Project. He gave evidence about the nature of the work and contract under which Ms Kostenko was engaged and issues that arose during her employment. His evidence went to the circumstances of the termination of her employment, and the University's actions in this respect.

[14] Ms Ferguson is the Chief Executive Officer of Ninti One. Her evidence went to the structuring of the Interplay Project and its relationship with the Flinders University. Her evidence detailed the various concerns she had with Ms Kostenko's behaviour. Notwithstanding these concerns, Ms Ferguson detailed the steps taken by Ninti One to review the progress of the Interplay Project and the Ninti One conclusion that the Project did not need and could not afford to have a full-time data analyst in any event given the nature of the project and its limited funds. Ms Ferguson detailed the steps she took to have Ms Kostenko removed from that project.

[15] Ms Gates and Mr Waltham are University Human Resource Management personnel. Their evidence went to their involvement in discussions with Ms Kostenko during and following the termination of her employment, and to actions they took in this respect.

[16] In addition, I have considered the substantial amount of documented evidence put to me in this matter.

The Submissions

[17] Ms Kostenko asserts that the termination of her employment was harsh, unjust or unreasonable, that it lacked a valid reason and was procedurally unfair. Ms Kostenko asserts that she was bullied by various persons and that this affected her work output and employment tenure. Ms Kostenko’s submissions are somewhat difficult to easily summarise but I have taken it that, amongst other things she asserts that the University effectively conspired with Ninti One to remove her from the Interplay Project. Ms Kostenko asserts that Ninti One acted unfairly and in breach of its own enterprise agreement and the Secondment Agreement. Ms Kostenko further asserts that the Flinders University acted unfairly in not insisting that Ninti One comply with the conduct and performance clause of the Secondment Agreement before it exercised the termination provisions of that agreement. Ms Kostenko appears to assert that the circumstances of her dismissal were such that she should have been paid redundancy payments pursuant to clause 35 of the Enterprise Agreement. Ms Kostenko asserts that funds to sustain her ongoing employment as a data analyst on the Interplay Project remain available to Flinders University. Ms Kostenko expects to be reinstated at the University or to Ninti One which she asserts is an associated entity and to work from either her home location in Perth or in Alice Springs. Her position was that the Commission should determine whether Flinders University and Ninti One were associated entities. Her evidence was:

“I don’t understand much, but I think based on the secondment agreement between Ninti One and Flinders may be an associated entity but I will let the Commissioner to decide or I will do further research after this hearing if I have any issue I will do appeal.” 12

[18] The University position is that Ms Kostenko was not made redundant under the terms of the Enterprise Agreement. The University asserts that the sole reason for the termination of Ms Kostenko's employment was the termination of the Secondment Agreement by Ninti One and the consequent absence of any alternative work or funding which could sustain her employment. In this respect the University asserts that the Employment Contract under which Ms Kostenko was engaged made it clear that her continued employment was subject to continuation of grant funding.

[19] The University position is that, while performance management initiatives consistent with the Enterprise Agreement had commenced, Ms Kostenko was not dismissed because of performance concerns.

Findings

Was Ms Kostenko a person protected from Unfair Dismissal?

[20] The Employment Contract established Ms Kostenko as an employee of the University. 13 Ms Kostenko was supervised by University personnel, she was remunerated by the University and was, in every respect, an employee of the University.

[21] Under the terms of the Secondment Agreement, Ninti One and the University assumed specified responsibilities and capabilities. 14 These responsibilities and capabilities did not make Ninti One Ms Kostenko's employer.

[22] Consequently, Ms Kostenko's concern that Ninti One did not comply with its own enterprise agreement, or that Ninti One did not extend to her procedural fairness, must be considered on the basis that the University was her employer. The University’s behaviour is considered later in this decision.

[23] I am satisfied that Ms Kostenko was both an employee of the University and was a person protected from unfair dismissal as she was covered by the University's Enterprise Agreement.

Was the termination of Ms Kostenko's employment a case of genuine redundancy?

[24] Both Ms Kostenko and the University have asserted that the termination of Ms Kostenko’s employment was not a case of genuine redundancy pursuant to s.389, but for different reasons. Because of the potential for confusion over this issue I have specifically addressed the issue of redundancy.

[25] Any claim Ms Kostenko may have for redundancy payments pursuant to clause 35 of the Enterprise Agreement must be differentiated from the question of whether the termination of her employment was consistent with the definition of a genuine redundancy in s.389 of the FW Act. Ms Kostenko’s access to redundancy benefits under the Enterprise Agreement is a matter outside of my jurisdiction, but I doubt that, as a fixed term employee, clause A35 has application to her.

[26] I have noted that Ms Kostenko may have redundancy rights pursuant to the National Employment Standards in the FW Act. I return to this issue later in this decision.

[27] Redundancy payment entitlements however, are not determinative of the entire redundancy issue for the purposes of this application. Section 385 states:

“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.”

[28] Consequently, as a matter quite separate from the application of any redundancy provision in the Enterprise Agreement, or entitlements under the FW Act, if the termination of Ms Kostenko’s employment is a case of genuine redundancy, that dismissal cannot be unfair. The concept of genuine redundancy for the purposes of s.385 is defined in s.389 which 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.”

[29] I note that, in so far as they are relevant, all three essential requirements set out in this clause must be met for the genuine redundancy definition to be met.

[30] In terms of s.389(1)(a) I am satisfied that the termination of Ms Kostenko’s employment occurred because Flinders University no longer required her job to be performed by anyone because of the position adopted by Ninti One relative to the cessation of the Secondment Agreement. There is no evidence before me that establishes that Flinders University, as Ms Kostenko’s employer requires the job of data analyst on the Interplay Project to be done by anyone else.

[31] In terms of s.389(1)(b) I note that clause A30 of the Enterprise Agreement deals with Managing Change. This clause establishes a consultation obligation on the University. To the extent that clause A30 applies to Ms Kostenko’s circumstances, the decision to terminate Ms Kostenko’s employment was made prior to consultation with her, I am unable to conclude that the requirement for compliance with the Enterprise Agreement obligation in this respect has been met.

[32] For the sake of completeness I have then considered the extent to which it would have been reasonable in all the circumstances for the Flinders University to redeploy Ms Kostenko in the University or within an associated entity. The evidence before me indicates that, subsequent to the termination of Ms Kostenko’s employment and, indeed subsequent to the FWC telephone conciliation process commencing, the University considered redeployment opportunities. However, I am not satisfied that this process occurred before the decision to terminate Ms Kostenko’s employment was made.

[33] Consequently, in terms of s.389, I am not satisfied that the termination of Ms Kostenko’s employment meets the definition of a genuine redundancy such that she is excluded from pursuing this application.

[34] Section 396 requires that I consider two other initial matters. In these respects I am satisfied that the application was made within the statutory time limit. Secondly, Flinders University is not a small business employer.

Was the termination of Ms Kostenko’s employment harsh, unjust or unreasonable?

[35] In order to consider the merits of Ms Kostenko’s application, I have detailed my conclusions about critical factual issues on the evidence before me.

[36] I have concluded that Flinders University and Ninti One were not associated entities for the purposes of the FW Act or, for that matter, Ms Kostenko’s employment. Section 12 of the FW Act establishes that the concept of ‘associated entity’ has the meaning given to it by section 50AAA of the Corporations Act 2001. The relationship between the Flinders University and Ninti One do not meet the requirements of that definition.

[37] Secondly, to the extent that Ms Kostenko refers to Flinders University and Ninti One as associated entities on the basis that they acted collaboratively to terminate her employment I have rejected that contention for the reasons set out later in this decision.

[38] I am not satisfied, on the evidence before me that Ms Kostenko was bullied by either Dr Cairney, Professor Wakerman or, for that matter anyone at all. The evidence does not support Ms Kostenko’s assertions in this respect and I have concluded that these assertions are without foundation.

[39] I have concluded that Professor Wakerman engaged in various discussions with Ms Kostenko from November 2012 to April 2013 in response to concerns about Ms Kostenko’s behaviour. Those concerns included Dr Cairney’s concern about Ms Kostenko’s manner of communication with her, 15 and her behaviour toward other Interplay Project personnel.16

[40] To the extent of inconsistencies in the evidence, I prefer the evidence of Professor Wakerman and Dr Cairney to that of Ms Kostenko relative to this issue. Both Professor Wakerman and Dr Cairney presented as calm and measured whilst Ms Kostenko’s behaviour in the hearing was, at best, volatile, argumentative and aggressive. My preference extends to accepting Professor Wakerman’s recollection about when he received advice from Ninti One rather than Ms Kostenko’s assertions in this respect.

[41] I have concluded that the discussions which Professor Wakerman had with Ms Kostenko were of a nature addressed in clause B14 of the Enterprise Agreement. This clause states:

“B14 PERFORMANCE REVIEW AND DEVELOPMENT - GENERAL STAFF

B14.1 [Framework] The performance review and development framework for general staff will provide the basis for assessing and development a staff member’s performance to achieve individual, work area and/or organisational goals. A key component of this framework is a formal review of a staff member’s performance and any associated training and development needs.

B14.2 [Scope] All general staff, other than casual staff, employed on a continuing basis or employed on a fixed-term appointment which exceeds 12 months will be required to participate in a formal review of performance.

B14.3 [Performance review] The formal review of performance will be conducted by the staff member’s supervisor, normally on an annual basis.

B14.4 [Performance review objectives] will be:

• to enable the supervisor to provide feedback on performance;



• to determine work priorities, workload and performance expectations over the next review period;



• to enable the supervisor to assess performance for the purposes of incremental progression, moving to a higher classification in any linked position and recognition for outstanding performance;



• to agree on plans for taking of recreation, long service leave and any other leave;



• to identify professional training and development needs and to assess the value of training undertaken in the reporting period; and



• to review the staff member’s position description/statement of duties for currency and relevance.

B14.5 [Conduct of the review] The formal review will be conducted in accordance with the University’s Performance Review and Development procedures.

B14.5.1 During the nominal life of the Agreement, the University will form a Performance Review and Development Procedures Working Group, the composition of which will include a member from each of the unions who are party to this Agreement. The purpose of the Group will be to provide advice on the development of simplified procedures.

B14.6 [Performance improvement: structured counselling] Concerns about a staff member’s performance and/or conduct should be addressed by the supervisor as soon as possible and not necessarily held over for the formal review. In the first instance, such concerns will be managed through a process of structured counselling, initiated by the supervisor. Structured counselling provides an opportunity for the staff member to attempt to resolve the concerns, within an agreed timeframe, by processes including cooperation, regular feedback and specific training/skill development. Where the concerns are resolved to the satisfaction of the supervisor, the staff member will be advised in writing.

Where structured counselling does not result in the staff member achieving sustained improvement in performance or conduct to the satisfaction of the supervisor, or where a pattern of unsatisfactory performance or conduct is evident despite related matters being addressed satisfactorily under this clause, the supervisor may proceed to apply the Disciplinary provisions of this Agreement.

B14.7 [Casual staff] The management of performance of casual staff will be in accordance with the University’s Performance Management Guidelines for casual general staff.”

[42] I have concluded that the University had concerns with Ms Kostenko’s behaviour, that clause B14 set out a process for addressing these concerns and that the actions taken by the University had not reached the point of involvement of the Executive Dean which might then result in formal disciplinary action. It follows that, had the University dismissed Ms Kostenko on performance grounds this would have been contrary to the Enterprise Agreement, given the limited steps taken to counsel her relative to her performance.

[43] The evidence of Ms Ferguson, Dr Cairney and Professor Wakerman confirms that while there were performance concerns relating to Ms Kostenko’s behaviour, the change in the project structure and resourcing was the catalyst for the termination of Ms Kostenko’s employment. Professor Wakerman’s evidence was that:

“Ms Pugsley: After you received the letter from Ms Ferguson in which she gave you formal notice that Ninti One was withdrawing from the Secondment Agreement, did you have discussions with Ms Gates from Human Resources about the options available to you.

Professor Wakerman: Yes I did.

Ms Pugsley: Can you remember that discussion?

Professor Wakerman: Well the discussion was along the lines of what should we do now, what should I do now, I have received this notice that Ninti One wishes to terminate the Secondment Agreement. I went back and had a look at the Secondment Agreement and both parties, both the University and Ninti One, there were provisions to terminate the Agreement and we discussed this and the view we formed together was that without funding we were not able to continue to employ Dr Kostenko if the Secondment Agreement was terminated.

Ms Pugsley: Did you also talk to the research office?

Professor: Yes I did. I had a conversation with someone in the research office, and I believe Ms Gates also had discussions with other people in the University and there was a consistent view that with termination of the Secondment Agreement there was no funding and as I did not have any alternative sources of funding, we would not be able to keep Dr Kostenko under contract.” 17

[44] Ms Ferguson's evidence went to the basis for her concerns about Ms Kostenko’s behaviour. However she also detailed the process implemented by Ninti One management to review the progress of the Interplay Project. 18

[45] Ms Ferguson expanded on this evidence in the following terms:

“The Secondment Agreement was terminated because we did not have the money to continue with a full time analyst, the only point at which that conduct was such that I did need to draw it to attention was in the later part of April as I said, where my staff walked out. Anything before that was mainly between as I now understand, because I didn’t understand it before this process, between the University and their employee, not us, but when it did spill over into being very clearly with us, then we needed to act on it, but the decision to restructure well predates any of that.” 19

[46] Ms Ferguson's e-mail to Professor Wakerman of 24 April 2013 stated:

“John
I tried to call before sending this which would very much have been my preferred way but things have escalated sadly

Unfortunately I am travelling for work until Monday

You are welcome to call my mobile at anytime but it may not be in range as I am travelling to a remote community

Many thanks for seeing Steve and I to discuss issues around Weiping’s Kostenko secondment to Ninti One. We continue to sincerely appreciate you are your staff’s ongoing contribution to the CRC-REP.

Obviously, never any easy topic to discuss and resolve, however after several months of effort and coaching and having made further enquiries we are not firmly of a view that Weiping is not able to support the Interplay project and the Project Leader, as stipulated in her full-time secondment agreement between Flinders University and Ninti One Ltd.

Events took a significant turn for the worse last week. These were documented by Sheree and I believe you have them. Ninti requests that Weiping be immediately removed from face to face contact with any of our project partners and from our Ninti One personnel.

Ninti is also seeking to terminate the agreement under Clause 14.1 (d) and (e) of the contract. Certainly her behaviour is not consistent with the values of Ninti One and the required teamwork in the project. Her behaviour has also raised OHS issues for other staff.

From the Ninti One and the CRC’s perspective, we have a particular focus on teamwork, good communication, flexibility, applied research appropriate to the remote Australian context and the associated empathetic approaches. Weiping has now demonstrated on multiple occasions to her supervisor and others that she is not able to meet our clearly articulated requirements, especially with the re-occurrence of anger and verbalisation issues.

Before last week we were of the view that appropriate counselling might be able to resolve these issues but now we must consider the wellbeing of other staff and the project itself.

We will take immediate steps in consultation with Sheree and other team members such as yourself to restructure the project to meet the project deliverables. That restructure will remove the full time analyst from the project.

Unfortunately this matter has escalated to a very serious level and needs urgent resolution. We ask that you immediately withdraw Weiping from the secondment and are willing to support that withdrawal through our further discussions.

Many thanks for your help and understand on this very difficult issue.

Kind Regards,
Jan
Jan Ferguson
Managing Director
Ninti One Limited: Information-Innovation-Ideas for remote Australia
Managing the: Cooperative Research Centre for Remote Economic Participation (CRC-REP)
....”

[47] Clearly, this e-mail identified performance concerns and I have concluded from it those performance concerns were factors that were taken into account by Ninti One in its decision to restructure the project. However, Ms Ferguson's evidence confirms that, while the 24 April 2013 email was not specific in this respect, the need to most effectively utilise limited financial resources resulted in the decision to operate the Interplay Project without a data analyst. Ms Ferguson’s evidence continued:

“Ms Kostenko: So you say, 11 of April, so whether you confirm that this is the meeting you decide the data analyst position will be cut.

That’s where we started to talk to Dr Wakerman about our serious concerns with the Project about not meeting its milestones and that it couldn’t afford a data analyst full time until June 2017 which is my understanding of the date of your contract.” 20

[48] Ninti One’s formal advice of the termination of the Secondment Agreement applicable to Ms Kostenko stated:

“Dear Professor Wakerman
Interplay Project - Secondment Agreement

I refer to my email on 24 April regarding the proposed restructure of the Interplay Project and write to confirm that Ninti One is seeking to terminate the placement of Dr Weiping Kostenko under the terms of the Secondment Agreement. The termination is made under Clauses 14.1 (d) and (e) of the contract and is effective 30 days from the written notice provided in my previous email dated 24 April 2013, that is, 24 May 2013.

The proposed restructure means that the project will move forward without a full time data analyst role. The position of Dr Kostenko is, therefore no longer required.

We will take immediate steps in consultation with Sheree Cairney and other team members such as yourself to restructure the project to meet the project deliverables.

Ninti One is prepared to meet its financial obligations to Flinders university under the Secondment Agreement until 30 June 2013 should that be required to facilitate transition arrangements for Dr Kostenko.

Should you have any further questions I would be happy to make myself available. I can be contact on my mobile xxxx xxx xxx.

Yours sincerely,
Jan Ferguson
Managing Director”

[49] As I have already indicated, Professor Wakerman obtained advice about the University’s capacity to employ Ms Kostenko after receiving the 24 April 2013 email.

[50] Further, Professor Wakerman’s evidence was that, after he received the formal advice of the termination of the Secondment Agreement, 21 he met with Ms Kostenko "to advise her that her employment would be terminated because Ninti One intended to restructure the project and terminate the secondment agreement.”22

[51] I have concluded that Professor Wakerman made the termination of employment decision based on the advice from Ninti One and subsequent advice about the effect of the termination of the Secondment Agreement.

[52] Taking all of these issues into account, I have concluded that, notwithstanding ongoing concerns over Ms Kostenko’s work performance and behaviour, the reason for the termination of her employment was because Ninti One advised that it was terminating the secondment agreement which governed Ms Kostenko’s employment and funding on the Interplay Project.

[53] I have considered Ms Kostenko’s assertions to the effect that her performance was affected by inadequate and unfair supervision and directions by Dr Cairney, and that the changes made to the survey she had proposed were flawed and would fundamentally reflect on her as an academic, such that she had to protest these changes to protect her reputation. Further, that Dr Cairney bullied her and did not properly counsel her.

[54] I am not satisfied that any of these allegations are sustained by the evidence before me. Even if I found otherwise, none of these matters alter the fact that the termination of Ms Kostenko’s employment occurred because Ninti One terminated the Secondment Agreement.

[55] The Secondment Agreement was between Ninti One and Flinders University. Ninti One referred to clauses 14.1(d) and (e). Clause 14 states:

“14. TERMINATION

14.1 Either party may terminate this Agreement at any time if:

(a) the other party commits a breach of this Agreement which is capable of remedy but which is not remedied within 30 days of notice to do so by the first party;

(b) the other party commits a breach of a material term of this Agreement;

(c) the Secondee’s employment with Flinders comes to an end;

(d) the Secondee engages in any conduct, which in the reasonable opinion of the party is detrimental to its interests;

(e) in the reasonable opinion of the party, the Secondment Objectives are consistently not being met; or

(f) any of the Projects are terminated or suspended for more than 30 days.

14.2 In addition, Flinders may terminate this Agreement immediately if:

(a) the Host Organisation fails to pay Flinders invoices within 30 days; or

(b) the Host Organisation becomes insolvent or is unable to pay its debts as and when they become due and payable.

14.3 Clauses 6, 10, 11, 12, 13 and 15 of this Agreement shall continue in force following the expiry of the Term of its earlier termination under this clause.”

[56] Ms Kostenko’s position was that allegations about her conduct and/or performance underpinned the Ninti One position and that Flinders University should have retained her as an employee while it addressed the secondment termination decision with Ninti One. Ms Kostenko referred to clause 8 of the Secondment Agreement which states:

“8. CONDUCT AND PERFORMANCE

8.1 If the Host Organisation has any concerns about the Secondee’s conduct or performance during the Secondment Period, then the Host Organisation will:

(a) bring the matter of concern to the attention of the Secondee and the Supervisor; and

(b) work with Flinders and the Secondee in good faith in an attempt to resolve the matter in accordance with this clause 8.

8.2 Performance reviews will be conducted in consultation with the Host Organisation and Flinders will rely upon reports of satisfactory performance provided by the Host Organisation before approving reclassifications or pay increases.

8.3 The parties acknowledge and agree that:

(a) the Secondee’s conduct during the Term will continue to be governed by Flinders’ rules and policies on discipline and misconduct; and

(b) any claim of underperformance by the Secondee during the Term will be handled in accordance with equitable principles and the “Academic Staff Performance” procedures in the Collective Workplace Agreement.

8.4 The parties acknowledge and agree that the Secondee is at all times entitled to fair and equitable treatment in compliance with all relevant Equal Employment Opportunity (“EEO”) policies and administrative and employment laws, including anti-discrimination legislation. The Secondee will at all times be entitled to seek support from relevant Flinders officers, programs and counsellors made available at Flinders.”

[57] I have concluded that Ninti One had serious concerns about Ms Kostenko’s behaviour. Had those concerns formed the sole basis for the termination of the Secondment Agreement, there may well have been an obligation on the Flinders University to challenge Ninti One’s decision to terminate the Secondment Agreement on the basis that Ninti One was not complying with its obligations under that agreement.

[58] However, the formal confirmation of the Secondment Agreement clearly refers to a restructuring of the Interplay Project and the evidence of Ms Ferguson confirmed the Ninti One conclusion that the Interplay Project had to be restructured and that a full-time data analyst was not required as a consequence of a review of the project resourcing. Consequently, I do not consider clause 8 of the Secondment Agreement to be relevant to these circumstances. Even if Flinders University had sought to dispute the Ninti One concerns about Ms Kostenko’s behaviour, there was no capacity to dispute the Ninti One decision to restructure the Interplay Project.

[59] The evidence of Ms Ferguson and Professor Wakerman and the documentation provided to me confirms that Ninti One is entirely responsible for managing the Interplay Project. Those project funds are allocated to Ninti One and it is that organisation that must account for their use. Flinders University’s access to the Interplay Project funds is governed by other agreements 23 but I have concluded that Flinders University has no capacity to access project funds on a discretionary basis.

[60] Section 387 states:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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 the FWC considers relevant.”

[61] I have considered these factors individually and collectively.

Valid Reason

[62] In Selvechandron v Petersen Plastics Pty Ltd 24 Northrop J stated:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that the employer and employee are treated fairly.”

[63] That enunciation of the concept of a valid reason was made under a legislative regime which has now changed in as much as s.387 sets out a more extensive array of factors which must be individually considered. I have nevertheless applied the Selvechandron definition in so far as it goes to the fairness of the Flinders University approach.

[64] The termination of Ms Kostenko’s employment occurred because Ninti One provided formal notice of the termination of the Secondment Agreement which governed her employment. Given the termination of the Secondment Agreement and the provisions of her employment contract, Ms Kostenko had no capacity to continue to undertake work as a data analyst on the Interplay Project.

[65] On this basis there was clearly a valid reason for the termination of her employment. To the extent that the decision to terminate Ms Kostenko’s employment was made for reasons associated with the management of the Interplay Project and hence, reasons not related to Ms Kostenko’s conduct or capacity, I have considered these factors later in this decision.

[66] Whilst Ms Kostenko’s conduct and performance may have been considered by Ninti One and were being addressed by Flinders University, I have concluded that these factors did not result in the termination of her employment.

Notification of the Reason

[67] Ms Kostenko was notified of the reason for the termination of her employment by Professor Wakerman on 8 May 2013 and was given formal written advice on 10 May 2013 in the following relevant terms:

“I refer to your recent discussions with the Director of the Centre for Remote Health (CRH), Professor John Wakerman, during which he advised you of the termination of the Secondment Agreement between Ninti One and the University, the arrangement supporting your current appointment. As a result of this, and in accordance with your contract of employment, I now write to advise that your fixed-term, full-time, appointment as a Data Analyst (Interplay Project), (Research Academic Level C) in the CRH (Flinders NT), School of Medicine, Faculty of Health Sciences, will cease with effect from 17 May 2013 as the grant funding required for this position is no longer available.” 25

Opportunity to Respond

[68] I do not consider that Ms Kostenko was given an opportunity to respond to the Flinders University decision to terminate her employment. That decision was taken by Professor Wakerman in concert with other Flinders University personnel before Ms Kostenko was told of the termination of her employment.

[69] However, as I have concluded that the termination decision was based on the termination of the Secondment Agreement, it is difficult to see that the provision of an opportunity to Ms Kostenko to respond to that Secondment Agreement termination and the restructuring of the Interplay Project by Ninti One when that decision had already been made, would change the situation confronting Flinders University.

[70] Had the Interplay Project not been restructured or had Flinders University moved to terminate Ms Kostenko’s employment on performance grounds, this factor would have assumed substantially greater relevance.

Unreasonable refusal to allow a support person

[71] I am not satisfied that Ms Kostenko requested a support person to be present at the meeting on 8 May 2013 when she was told of the termination of her employment.

[72] Professor Wakerman’s evidence was that he met with Ms Kostenko on 29 April 2013, at which meeting he explained that Ninti One had expressed concerns about the project meeting its objectives and that he was seeking legal and human resources advice and would talk further with her. 26

[73] In that context I consider that, while the FW Act does not require that an offer of a support person was extended to Ms Kostenko this may have helped avoid at least some of the confusion inherent in this matter. As it was, I am not satisfied that Ms Kostenko had the opportunity to request that a support person assist her in this meeting.

Unsatisfactory Performance

[74] For the reasons I have already specified, I do not consider that the termination of Ms Kostenko’s employment was a consequence of the concerns held by the Flinders University over her work performance. The requirement to consider warnings does not therefore arise.

Flinders University size - impact on procedures

[75] Flinders University is a substantial employer. I am satisfied that it substantially followed its own procedures, together with the provisions of the Enterprise Agreement in this matter.

Absence of Human Resource Management expertise

[76] Flinders University has a dedicated Human Resource Management function. Its Human Resource Management personnel were involved in this matter.

Other Matters considered Relevant

[77] I have found that there was a valid reason for the termination of Ms Kostenko’s employment. That reason was the Ninti One decision to restructure the Interplay Project and terminate the Secondment Agreement as it decided not to maintain a data analyst for that Project. To the extent that decision was not based on Ms Kostenko’s capacity or conduct, it may not be taken into account pursuant to s.387(a). It is, however, critical to the University’s decision to terminate Ms Kostenko’s employment. Simply put, Ms Kostenko was employed to be the data analyst on the Interplay Project. She was seconded to Ninti One for that Project. The requirement for a data analyst was removed by Ninti One.

[78] I am satisfied that the evidence of Professor Wakerman establishes that he sought advice about the University’s capacity to continue to employ Ms Kostenko following the termination of the Secondment Agreement and that the termination of Ms Kostenko’s employment followed advice that this was not possible. There is nothing unfair associated with this conclusion which fundamentally reflects the terms of Ms Kostenko’s contract of employment. 27 The termination of the Secondment Agreement meant that Flinders University could no longer access grant funding for Ms Kostenko’s position.

[79] Consequently, whilst Ms Kostenko’s termination does not meet the definition of a redundancy for the purposes of clause A35 of the Enterprise Agreement, or, cannot be described as a "genuine redundancy" for the purposes of s.389 of the FW Act, it appears to clearly meet the definition of a redundancy in s.119. That section relevantly states:

“119 Redundancy pay

Entitlement to redundancy pay

(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b) because of the insolvency or bankruptcy of the employer.

Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.”

[80] Consequent upon the Ninti One restructure of the Interplay Project, Flinders University no longer required the position of data analyst (Interplay Project) as it is described in Ms Kostenko’s employment contract, 28 to be done by anyone.

[81] As a further relevant factor, I have noted that Flinders University paid Ms Kostenko until the end of June 2013. This payment exceeded its obligations under both the employment contract, the Enterprise Agreement and the FW Act.

Conclusion

[82] Having considered all of the circumstances of this matter, including the factors set out in s.387 of the FW Act, I have concluded that the termination of Ms Kostenko’s employment was neither harsh, unjust nor unreasonable.

[83] It was a reasonable and appropriate response to a decision made by the Project Manager, Ninti One, which was outside of the Flinders University control and which left Flinders University with no realistic alternative other than to dismiss Ms Kostenko.

[84] The application is dismissed accordingly. An Order [PR542779] giving effect to this decision will be issued.

Appearances:

W Kostenko on her own behalf.

C Pugsley representing Flinders University of South Australia.

Hearing details:

2013.

Adelaide (video-links to Perth, Alice Springs and Melbourne):

August 26 and 27

September 4 and 9.

 1   Exhibit K2, Secondment Agreement, pages 130-154

 2   Ibid, clause 5; page 135

 3   Ibid, clause 5.2, page 136

 4   Ibid, Schedule 1, page 143

 5   Ibid, Annexure 1, pages 152-154

 6   Ibid, Schedule 1, page 145

 7   Exhibit K2, page 116

 8   Exhibit F5

 9   Exhibit F2, para 17

 10   Ibid, para 19

 11   Exhibit F6

 12   Transcript (sound file), 26 August 2013, 11:28:48

 13   Exhibit K2, page 116

 14   Exhibit K2, Secondment Agreement, clause 7.4, page 137

 15   Exhibit F2, paras 9,10 and 14

 16   Ibid, paras 8 and 11

 17   Transcript (sound file), 26 August 2013, 2:09:38

 18   Exhibit F3, para 11

 19   Transcript (sound file), 27 August 2013, 11:15

 20   Ibid, 11:34:42

 21   Exhibit K2, page 127

 22   Exhibit F2, para 21

 23   For example, the Essential Participants Agreement, Exhibit F8

 24 (1995) 62 IR 371 at 373

 25   Exhibit F6, para 1

 26   Exhibit F2, para 17

 27   Exhibit K2, page 116

 28   Ibid

Printed by authority of the Commonwealth Government Printer

<Price code C, PR542778>