Wendy MacLeod v Alcyone Resources Ltd T/A Alcyone

[2013] FWC 9311

[2013] FWC 9311[Note: An appeal pursuant to s.604 (C2013/7008) was lodged against this decision - refer to Full Bench decision dated 4 March 2014 [[2014] FWCFB 1542] for result of appeal.]

The attached document replaces the document previously issued with the above code on 28 November 2013.

The decision is amended by correcting the references in the endnotes.

Kylie Kinsela

Associate to Deputy President McCarthy

29 November 2013

[2013] FWC 9311

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Wendy MacLeod
v
Alcyone Resources Ltd T/A Alcyone
(U2013/9693)

DEPUTY PRESIDENT MCCARTHY PERTH, 28 NOVEMBER 2013

Application for unfair dismissal remedy - genuine redundancy-operation of s.389(1) & (2)

Background

[1] Mrs Wendy MacLeod (the Applicant) is a mature woman who had intended to work about another 18 months and retire. She commenced work with Alcyone Resources Ltd T/A Alcyone (the Company) on 15 June 2011 as an Executive Assistant to Mr Andrew King (Mr King), the Managing Director of the Company. Her duties included preparing monthly reports for the Board of Directors, maintaining various corporate records, answering the telephone, maintaining the Company’s web site, arranging flights and accommodation for managers and clients, producing Board reports, ordering kitchen supplies, cleaning up after Board meetings, attending the post office to collect mail, ordering stationery, maintaining the printer, preparing correspondence and handling petty cash.

[2] Between March and May 2013, the Company underwent a restructure of its Board and the office team in Perth. The restructure included the resignation of all previous Board members and the appointment of a new Board. On 13 March 2013, Mr King resigned as Managing Director of the Company. The Company subsequently operated without anyone in the position of Managing Director until Mr Michael Reed (Mr Reed) was appointed to that position on 22 April 2013.

[3] Around 22 March 2013 the new Board decided the position of Executive Assistant was no longer required and that no-one was needed to perform that role. On 2 April 2013, Mr Trevor Harris (Mr Harris), the Chief Financial Officer, informed the Applicant that her position was redundant and as there were no other suitable positions for her to be redeployed to, her employment would be terminated. The Applicant was informed that her dismissal would take effect on 23 April 2013, although it seems the dismissal actually took effect on 30 April 2013.

[4] The Company asserts that by operation of s.385(d) of the Fair Work Act 2009 (the FW Act) the Applicant was not unfairly dismissed as the dismissal was a case of a genuine redundancy. The Applicant asserts that the dismissal was not a case of genuine redundancy on two grounds. Firstly, the Applicant asserts that the Company was obliged to confer with her about her position being abolished and measures to avert or mitigate the adverse consequences of that decision and it did not. Secondly, the Applicant asserts that she should have been redeployed to a newly created receptionist position.

[5] Here it is not disputed in the Applicant’s submissions that the Applicant’s position was no longer required to be performed by anyone, although the Applicant in her evidence seemed to infer that substantial parts of the role were still required to be performed. I will not traverse the evidence and submissions in this decision concerning whether the Applicant's role was no longer required to be performed as it is obvious that a reorganisation of the Company and the functions performed resulted in the Applicant’s position being abolished. 

[6] The Applicant relies on s.388(1)(b) and (2) of the FW Act and I will address in more detail below whether those requirements were satisfied.

The Evidence

[7] The Applicant, in her witness statement, gave evidenced that on 2 April 2013 Mr Harris met with her and stated that: 

“(a) because Mr King had left the business, my [the Applicant’s] position was redundant;

(b) Pam Ryan (Ms Ryan) would be taking over my [her] duties and I [she] was to train her to perform those duties;

(c) Ms Ryan would be moving her working hours from 0.8 FTE to full-time;

(d) ARL would be employing a Junior Receptionist to assist Ms Ryan; and

(e) these measures were being taken to reduce ARL’s costs; and 

(f) 23 April 2013 was [would be] my [her] last day of employment.”

[8] There was no evidence in chief by the Applicant regarding any discussion with her about redundancy and the likely effects on her. Nor was there any evidence in chief from her about any discussion about the potential for alternative employment within the Company. She did evince that on 2 April 2013, when Mr Harris informed her of her redundancy, he advised her that a junior receptionist would be employed. The Applicant “got a very strong impression” that she was not considered for the role.

[9] In cross-examination the Applicant’s evidence was confusing regarding whether or not she was told that a junior receptionist role was going to be created. She said at one point in answer to a question that she was told a junior receptionist role was to be created that “Mr Harris didn’t inform me he was wishing to employ a junior receptionist”, yet later “he [Mr Harris] did inform me that he was employing a junior receptionist”, and that the role was explained to her. She also evidenced that “Mr Harris informed me that he was employing a junior receptionist to support Ms Ryan”, having already evidenced that Mr Harris had informed her that Ms Ryan would be performing her role and she was to train Ms Ryan for that purpose.

[10] It also seems that the Applicant did not regard the role as a junior role but rather a senior one because either she had performed the tasks or role, or a senior person could have performed the role.

[11] After Mr King’s departure the Applicant continued to perform some of the duties she had performed for Mr King and was also involved in some of the recruitment preparation for the junior receptionist position and the training of Ms Ryan in the performance of her functions. 

[12] It is clear the Applicant was fully aware that a junior receptionist position was being created and that a “junior employee” would be employed in that position. The only conclusion from that state of affairs is that regardless of the age of the person to be engaged in the junior receptionist position, it would not be a “senior” position. The clear inference from that was that the salary involved would be substantially less than that for a senior position and that the Applicant had been engaged in a senior position. In short, the salary for the junior receptionist position would be substantially less than what the Applicant was being paid as it involved more basic administrative tasks than the Applicant had been performing.

[13] It is also clear from the evidence that the Applicant was not asked whether she may be interested in the junior receptionist role. The evidence also establishes that the Applicant never raised with the Company that she be considered for that position, nor did Mr Harris ever say to the Applicant that she should not register an interest or apply for the position.

[14] It is also clear from the evidence that Mr Harris did not consider there were any other positions within the Company that would have been suitable for her to be redeployed into.

[15] Mr Harris allowed the Applicant to attend meetings with recruitment agencies after 2 April 2013 and prior to the date her dismissal took effect. However, the Applicant did not regard this as an effort to try and reduce the negative effects of the termination. It was unclear from the Applicant’s evidence whether this time off was paid or unpaid. At one point she evidenced that it was paid yet at other points she seemed to assert that she took earlier, or possibly later, lunch hours. 

[16] Mr Harris gave evidence that on 13 March 2013 the Managing Director, Mr King, resigned. A decision was made on 15 March 2013 that the position of Managing Director would be filled eventually but would not be likely until the end of the 2013. 

[17] In April 2013 it was then decided that a Managing Director be appointed earlier than previously predicted. On or about 15 April 2013, a decision was made to appoint Mr Reed to that position. Mr Reed was the Mine Manager at the Texas Project in Queensland. It was decided that he would stay at the Texas Project and his assistant support would be provided by an assistant already employed at the Texas Project. At the end of 2013, it was planned for Mr Reed to relocate to Perth.

[18] Mr Harris gave evidence that as a consequence of Mr King’s resignation, and after it was decided to reorganise the balance of the functions of the Applicant, the Applicant’s position would be made redundant. He considered whether there were any alternative positions available to redeploy the Applicant into. There were two existing administrative positions on the Texas Project in Queensland and two administrative positions in Perth. There were already employees engaged and performing those roles and in any event the Applicant was not considered suitable for those positions.

[19] Mr Harris evidenced that a new position of junior receptionist was created in Perth. He stated that the role was a junior role consisting of basic, administrative tasks. It attracted a salary of $45,000 per year whereas the Applicant had been employed on a salary of $76,000 per year. He thus formed the view that it would constitute a significant and unacceptable demotion to the Applicant if he endeavoured to convert her current role into the junior receptionist role. He also took into account that the Applicant had not shown any interest to be redeployed within the Company’s operations, nor had she applied for, nor expressed any interest, in the position at all. As the Applicant was fully aware of the new position and the terms and conditions it attracted, Mr Harris took the view that if there had been an interest, the Applicant would have conveyed that interest to him.

[20] Mr Harris also said he did not offer the junior receptionist position to the Applicant as he considered it would be insulting to her. He believed that he showed more respect to the Applicant by not offering the junior receptionist position to the Applicant than by offering the position to her.

[21] Mr Harris stated that in his discussion with the Applicant on 2 April 2013, he had told her that there was no role for the position of a personal assistant to the Managing Director and she agreed, indeed she commented that she was surprised it had not happened sooner. He says that he had several discussions with the Applicant during the notice period between 2 April 2013 and 23 April 2013 during which the Applicant thanked him for the way in which the process was being carried out.

[22] He stated that he also advised her that she had flexibility to attend job interviews during her notice period, of which she availed herself, as she was in and out of the office for significant periods between 2 April 2013 and 23 April 2013. 

[23] Mr Harris had not discussed the upcoming redundancy with the Applicant prior to a decision to dismiss her, did not consult with her about the potential for her to be redeployed and had no discussion with the Applicant prior to the meeting on 2 April 2013 where the Applicant was given her termination notice.

The Legislation

[24] The FW Act provides in s.389 as follows:

“(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.”

[25] In Ulan Coal Mines Limited 1(Ulan) the section was described as s.389(1) having an “inclusionary aspect” and s.389(2) having an “exclusionary aspect”2. If the conditions of s.389(1) are satisfied, then the redundancy is genuine and the dismissal must then be included as a genuine redundancy.

[26] If a dismissal is classed as a genuine redundancy by the meeting of the conditions of s.389(1), then the dismissal is classed as a genuine redundancy. That is the inclusionary aspect referred to in Ulan. If a dismissal is a genuine redundancy it is to be excluded from being classed as a genuine redundancy if the conditions of s.389(2) are met. That is the exclusionary aspect referred to in Ulan.

[27] Thus, it is only if a dismissal is a genuine redundancy that there is any need to consider s.389(2) at all. If by application of s.389(1) a redundancy is not a genuine redundancy then s.389(2) has no work to do. The only work s.389(2) has to do is to exclude those dismissals that were included in the class as being genuine redundancies.

[28] For a dismissal to be a genuine redundancy when an employee is covered by a modern award then s.389(1) requires two positive findings. Firstly, it must be found that the person’s job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Secondly, it must be found that the employer complied with any award obligation to consult with the employee about the redundancy.

[29] If both of these findings are positive, then the dismissal is a genuine redundancy. If they are not then the dismissal is not a genuine redundancy.

[30] The condition of s.389(2) is if a dismissal is a case of a genuine redundancy and it would have been reasonable in all the circumstances to redeploy the person dismissed within the employer’s enterprise or an associated enterprise, then it is excluded from being classed as a genuine redundancy.

Consideration

Were the conditions of s.389(1)(a) met?

[31] It is not in dispute here that the dismissal of the Applicant was a consequence of the Company no longer requiring the Applicant’s role of Executive Assistant to the Managing Director to be performed by anyone because of changes in the operational requirements of the Company’s enterprise.

[32] Even if it were in dispute, as the Applicant appeared to evidence, I find that it is clear that the conditions of s.389(1)(a) are satisfied.

Were the conditions of s.389(1)(b) met? Did the Company comply with award obligations to consult?

[33] The modern award that is asserted to apply is the Clerks Private Sector Award 2010 (the Clerks Award). The Company, at one point, said it made no submission as to whether the Clerks Award did apply and at another point conceded that it did. I find that that the Clerks Award covered and applied to the Applicant whilst she was employed by the Company.

[34] The Clerks Award provides that where an employer has made a definite decision to introduce major changes that are likely to have significant effects on employees, the employer must notify the employees likely to be affected (Clause 8.1(a)). Major change is defined to include termination of employment (Clause 8.1(b)). The employer must also discuss the introduction of the changes and measures to avert or mitigate the adverse effects of the changes.

[35] Clearly the Company was obliged to consult the Applicant. The question here is whether the Company fulfilled that obligation.

[36] The submissions of the Company stated that the decision to dismiss the Applicant was made on 22 March 2013. The submissions also stated that between 22 March 2013 and 2 April 2013, Mr Harris considered whether there were any other suitable positions available that the Applicant might be redeployed to. There is no suggestion that there was a consultation with the Applicant about the decision, rather the Applicant was advised of the decision on 2 April 2013.

[37] Mr Harris, rather than advising the Applicant immediately after the decision on 22 March 2013, decided to explore alternative employment opportunities for the Applicant within the enterprise. He then decided that there were no alternative positions and proceeded to inform the Applicant of the outcome of his considerations. Mr Harris did not inform the Applicant of his considerations and how he arrived at his conclusions in that regard. It was reasonable for Mr Harris to explore employment alternatives before entering into discussions with the Applicant about the redundancy. However, it would also be reasonable to involve the Applicant in those explorations and potential alternatives at some point. 

[38] The Company thus, through Mr Harris, made all the decisions without consultation and also made decisions about alternative positions that may have been suitable to redeploy the Applicant into without involving the Applicant at all. By dealing with the process in this manner the Company was making decisions in effect on behalf of the Applicant without any of her views being known to them or her having any opportunity to influence those views. Had the Applicant been given that opportunity she may have informed the Company that the junior receptionist position was not suitable or she may have informed them that it was. The Company would then have been in the position of making a decision, with that knowledge, whether the position was suitable or was not suitable. 

[39] I am sure that Mr Harris had the best of intentions of not offending the Applicant, but the obligation under the Clerks Award is to canvass alternatives to dismissal and anything which may avert or mitigate the effects of the redundancy. Whilst it may not have been obvious to Mr Harris given that the Applicant often did perform some of the tasks involved and the nature of the work of the position, it was possible that the junior receptionist position may have been suitable. The obligation here then involved giving the Applicant the opportunity to have an input into the decision as to whether the alternative position was suitable. 

[40] Taking all of the above matters regarding the obligations under the Clerks Award, I find that the Company did not fulfil the obligations under the Clerks Award to consult the Applicant.

[41] Therefore the requirements of s.389(1)(b) were not met. The dismissal therefore was not a genuine redundancy.

[42] As the dismissal was not a genuine redundancy, it is not necessary for me to consider whether it would have been reasonable in all the circumstances for the Applicant to be redeployed within the Company’s enterprise for the purpose of determining whether the Applicant was excluded from making an unfair dismissal application by operation of s.385(d) of the FW Act.

Was the Dismissal Unfair?

Was there a valid reason for the dismissal?

[43] Here it is not contested that the Applicant’s job was made redundant. It is also not contested that there was only one potentially suitable other position that the Applicant could have been redeployed to. That position was a new position of junior receptionist. The Applicant asserts that the position was suitable. The Company asserts that it was not. The question that arises is whether, by not offering the junior receptionist job to the Applicant, her dismissal was unfair.

[44] The Company asserted the position was not suitable because of the low level duties involved in the position compared to the duties the Applicant had been performing. The higher-level duties of the Applicant were not going to be performed by the junior receptionist, but rather had been reassigned to Ms Ryan. 

[45] The Applicant asserted that she was capable of performing the tasks and had performed many, if not all, of those tasks before.

[46] The Company also asserted that the salary was significantly less than the salary the Applicant had been receiving, a reduction from $78,000 per annum to $45,000 per annum.

[47] Whilst the Applicant now asserts that the position was suitable yet at no time during the period she was conscious that her position might become redundant did she make her view known to the Company. The Applicant clearly had reasonable opportunities to make her views known to Mr Harris. Just as Mr Harris did not provide an opportunity to the Applicant to discuss suitability for an alternative position, I consider there was some onus on the Applicant to make it known to Mr Harris that she may consider that position suitable.

[48] The position involved was one in quite a small office where there were only two administrative staff employed and the new Managing Director was located in Queensland with a projected transfer to Perth at the end of 2013.

[49] Taking all of these circumstances into account, I consider that the Company had substantial grounds to form the view that it did that the position was not suitable for the Applicant. I agree with the Company and find the position was not suitable.

[50] There was thus a valid reason for the dismissal, although that reason was not related to the Applicant’s capacity or conduct. Indeed the Company was complimentary of the Applicant’s conduct and performance. Rather, the reason was that the Company had been restructured, the Applicant’s position was made redundant and the Company did not consider the Applicant suitable for a new position that was established. 

[51] It is doubtful that in the circumstances here there is a need to consider s.387(a) at all but for the sake of convenience I have dealt with the validity of the reason for dismissal under this heading. I also find that there was a valid reason for dismissal but the dismissal did not relate to conduct. The dismissal could potentially and perversely relate to the capacity of the Applicant in that she had too great a capacity for the junior receptionist role.

[52] As it seems it is necessary to make a finding (see Chubb v John Thomas 3), I find that there was no valid reason for dismissal relating to the capacity or conduct of the Applicant.

Was the Applicant notified of the reason?

[53] I find that the Applicant was notified of the reason for her dismissal. She was not notified of any reason related to her capacity or conduct as there was no criticism of her by the Company in that regard.

Was the Applicant given an opportunity to respond?

[54] The Applicant at the meeting of 2 April 2013, where she was informed of her dismissal, was given an opportunity to respond to the reason for her dismissal and she reacted in a non critical and even complimentary way to the Company both at that meeting and subsequently. Again, as the dismissal was not related to capacity or conduct, the opportunity to respond did not relate to those issues. 

Was the Applicant refused any request to have a support person present? 

[55] There was no evidence of any request made for a support person to be present.

Had the Applicant been warned about unsatisfactory performance?

[56] The reason for dismissal was not related to any unsatisfactory performance.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal

[57] I find that the size of the Company’s business, and especially its small administrative team overall, and in Perth, did impact on the procedures followed.

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

[58] The Company did not have a dedicated human resource management specialist or expertise. If such expertise were available then quite possibly the consultation requirements of the Clerks Award may have been met, but I doubt that it would have changed the outcome. 

Other matters that I consider relevant

[59] I consider the personal circumstances of the Applicant are relevant. She was at the stage of her career and proximity to retirement that the dismissal had a detrimental effect on her plans and future. The circumstances regarding the Company’s reorganisation and endeavours to streamline its administrative functions are also relevant considerations.

[60] After considering all of the above, I find that the dismissal was not unfair. The application is dismissed.

DEPUTY PRESIDENT

Appearances:

S Heathcote for the Applicant.

J Long of HLS Legal for the Respondent.

Hearing details:

2013.

Perth:

30 October.

 1   Ulan Coal Mines v Honeysett & Ors [2010] FWAFB 7578 [PR502246].

 2 Ibid at [5].

 3   Chubb Security Australia Pty Ltd v John Thomas [2000] AIRC 822 [S2679].

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