Will Owens v Queensland Airports Limited

[2021] FWC 832

[2021] FWC 832

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Will Owens
v
Queensland Airports Limited
(U2020/4697)

DEPUTY PRESIDENT LAKE BRISBANE, 16 FEBRUARY 2021

Application for unfair dismissal remedy – whether genuine redundancy – consideration of operational requirements of the business – mass scale redundancies and notification – found to be a genuine redundancy – jurisdictional objection upheld - application dismissed.

[1] Mr Will Owens (the Applicant) has made an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in respect of his dismissal by Queensland Airports Limited (QAL, or the Respondent). The application was made on 13 April 2020.

[2] The Applicant performed work as Regional Project Manager (Townsville) for the Respondent on a full-time basis from 9 October 2017 until his dismissal on 29 March 2020.

[3] The Respondent raised the jurisdictional objection that the Applicant was dismissed by reason of genuine redundancy. The matter was listed for conciliation but did not proceed as the Respondent sought to have the jurisdictional application determined by way of hearing. The matter was allocated to me for consideration and I issued Directions for filing of material and listed the matter for a Hearing.

[4] Section 396 of the Act requires that four specified matters must be decided before the merits of the application may be considered.

[5] At the time of the Applicant’s dismissal, the Respondent employed 217 employees. There was no contention that the Respondent was a small business employer or that the Applicant was not a person protected from unfair dismissal.

[6] There was no contest, and I am satisfied that:

(a) the application was made within the period required by s.394(2);

(b) the Applicant was a person protected from unfair dismissal; and

(c) the Respondent was not a “small business employer” as defined in s.23 of the FW Act.

[7] At the Hearing held on 8 September 2020, the Applicant gave evidence on his own behalf. The Respondent was represented by Ms Kerry Gibb of MinerEllison Gold Coast, instructed by Ms Leith Wiblen, General Manager of People and Culture for the Respondent. Ms Wiblen and Mr Travis Gallagher (General Manager Infrastructure) gave evidence at hearing.

[8] I have considered all the evidence and submissions and summarise below that which is relevant to the issue for determination: whether the dismissal can be classified as a genuine redundancy within the meaning of the Act. As will become apparent from the reasons below, I am satisfied that the Applicant’s dismissal was a genuine redundancy.

LEGISLATION

[9] Section 390(1) of the Act sets out the circumstances in which the Commission may grant a remedy by way of reinstatement or compensation for unfair dismissal. It provides:

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).’

[10] However, s.396 of the Act sets out a number of matters which the Commission must consider before turning to the merits of an unfair dismissal application. It provides:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[11] As is made clear from the above provisions of the Act, I must determine whether the termination of the Applicant was a genuine redundancy before considering the merits of the application.

[12] Section 389 of the Act defines genuine redundancy for the purposes of s.396 as follows:

389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.

EVIDENCE

[13] As noted above, the Applicant was employed as Regional Project Manager for Townsville from 9 October 2017 to his dismissal on 29 March 2020.

[14] The Respondent’s core business is to develop and operate regional airport services in Queensland, including airports at Gold Coast, Towsville, Mount Isa, and Longreach.

[15] Ms Wiblen gave evidence that as a result of the COVID-19 pandemic, the aviation industry within Australia and worldwide was catastrophically impacted, and the Respondent’s business was not immune to this. Ms Wiblen said that on 20 March 2020, Mr Chris Mills, QAL’s CEO, advised the organisation (including the Applicant) that passenger numbers, revenue, and activity had more than halved, and there was a forecast of a further 75% decline in passenger numbers. Ultimately, there was a drop in traffic of 95%.

[16] Ms Wiblen said that the Respondent was required to take immediate action to ensure that QAL remained solvent, which included a company-wide review of operations to determine where costs could be saved. This was communicated in the email correspondence from Mr Mills on 20 March 2020.

[17] Management implemented a range of cost saving measures, which was explained in the Respondent’s jurisdictional submissions: 1

[14] All regional capital projects were deferred or put on hold, with the exception of those projects already in construction (as these projects were on average already about 70% completed at the time, and could be completed quickly with a reduced workforce).’

[15] With respect to its workforce comprising approximately 219 employees at the time, QAL was required to quickly implement a range of cost saving measures including:

(a) standing down employees either full time (27) or part time (124) depending on the availability of work to be done;

(b) ceasing to roster casual employees for any shifts (23); [and]

(c) identifying roles which were no longer required at all (14)…

[18] Following the review, the role of Project Manager that was occupied by Mr Owens was not required. The projects he managed were either put on hold or, for those that continued, the work was dispersed to other roles, to be managed to completion.

CONSIDERATION

[19] As I have noted above, I must first consider whether the Applicant’s dismissal was a genuine redundancy as a threshold issue. In so doing, I must consider the criteria under s.389 of the Act.

Did the Applicant’s employer no longer require the Applicant’s job to be performed by anyone because of operational requirements of the employer’s enterprise?

[20] In considering a whether there has been a reorganisation or redistribution of duties, it is pertinent to consider whether the employee has any duties left to discharge. 2 Where there is no longer any function or duty to be performed by an employee, his or her position becomes redundant even where aspects of that employee’s duties are still being performed by other employees.3

[21] Hamberger SDP considered this issue in Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt 4 and established that the test is whether the previous job has survived the restructure or downsizing, rather than a question as to whether the duties have survived in some form. In Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488, the Full Bench considered and applied the decision of Ryan J in Jones v Department of Energy and Minerals (1995) 60 IR 304 and said:

[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:

“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)”

This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.

[22] Operational requirements is a broad term, encompassing present performance of the business; the state of the market in which the business operates; steps that may be taken to improve efficiency by installing new processes, equipment or skills, or by arranging labour to be used more productively; and the application of good management to the business.

[23] The Applicant conceded that the Respondent told him that his job was not required, however, submitted that he did not believe the Respondent no longer required the job to be done by anyone. The Applicant conceded that there were changes in the operational requirements of the business, but said that he considered that 95% of tasks he had performed were still being performed by other staff and consultants of the Respondent.

[24] The Respondent submitted that the Applicant’s role no longer existed as the Applicant’s tasks had been redistributed, and the business no longer required his position to be filled, and does not require someone to do the Applicant’s job. The Respondent’s evidence was that there had been a significant downturn of the business as a result of the global COVID-19 pandemic.

[25] The Respondent submitted there have been changes in the operational requirements of the business. Due to the COVID-19 shutdown, the Respondent said it had experienced a severe downturn in work and has had to downsize its labour force, and that at the time of filing its written submissions, it had stood down 27 full time and 124 part time staff, ceased rostering casual employees for any shifts, and identified 14 roles no longer required. The Respondent submitted that only 17 roles remained unchanged across the business.

[26] In Solari v RLA Polymers Pty Ltd 5, the Commission considered a case where an employer closed one of its two plants and only one employee, a long-term employee of some 16 years, was made redundant. Sams DP found the respondent had a difficult choice to make on the basis of its operational requirements and its knowledge of the applicant’s skills and experience, and ultimately dismissed the applicant. Sams DP said (my emphasis):

[15] It is perfectly understandable that the applicant would feel hurt, upset and even betrayed by the respondent’s decision to make him - and only him - redundant. It is also understandable that he believes he has the skills to perform the work of the other permanent employees. Most employees after 16 years service would feel they have the experience and knowledge to perform work across the broad spectrum of a company’s operations. This is a natural human reaction. However, when compared to others, this might not always be the reality. Ultimately however, it is the prerogative of Management to manage its business as it sees fit; subject to treating its employees fairly and honestly.

[16] Given the applicant’s 16 years of loyal and conscientious service (which I accept unreservedly), and the respondent’s genuine expressions of regret over the applicant’s redundancy (which I also accept), I have a great deal of sympathy for the applicant. However, sympathy alone does not overrule the legal position or the policy intent of the Act, which denies access to an unfair dismissal remedy where an employee’s termination of employment is a genuine redundancy, as defined. Any forced redundancy is always most regrettable and likely to have a severe impact on an employee and his/her family, particularly someone of the applicant’s age. This is, after all, why all employees are protected, in part, by redundancy payments under their relevant Award or Agreement and why minimum redundancy standards are now a legislated feature of the National Employment Standards (NES). I have no doubt that the respondent acted appropriately in that regard and, in fact, provided a greater period of notice than the Award provides.

[27] Here, there is clear evidence of a significant downturn in business. The Respondent was entitled to take steps to ensure business survival where they were facing a significant and unknown period of revenue decline which included: redundancies, stand-downs, and other changes in staffing arrangements.

[28] In the interview, which was covertly reordered by the Applicant, but allowed in evidence by the Respondent, on 24 April 2020, the Respondent made it clear that the pandemic had severely impacted the aviation industry and the business had been forced to dramatically cut back its business expenses, which included reducing capital expenditure through stopping projects or finishing off those in execution and reducing staff numbers. The Applicant was informed that his projects were being halted or reduced in scope and that his role was no longer required. The Applicant was informed that redundancies were happening across the business and that the decision involving the Applicant was not based upon any performance issues. The decision to end the employment relationship with the Applicant was purely as part of an organisation wide effort to make a dramatic change in the size and scope of the business to survive the brutal impacts of the pandemic.

[29] The message was confused as in the haste to have the conversations with all the affected staff, the employer had not correctly characterised the Applicant’s employment relationship and during the conversation he was informed that he was going to be terminated in accordance with his contract with one months’ notice, paid in lieu.

[30] Despite this confusion over what the severance amount would be, this was corrected shortly afterwards. The elimination of the Applicant’s role was a direct result of the downsizing that the organisation undertook. Some capital projects he was responsible for were taken to completion and others were reduced in scope or halted. The employer is entitled to make relevant decisions over how to manage their business. What is clear is that the role was no longer required due to the respondent’s changed operational requirements.

Did the Respondent comply with any obligations in a modern award or enterprise agreement that applied to the employment to consult about redundancy?

[31] The obligation on an employer to consult about redundancy only arises when a modern award or enterprise agreement applies to an employee and that modern award or enterprise agreement contains requirements to consult about redundancy. There is no legislative requirement to consult about the redundancy before a decision is made to make an employee redundant.

[32] The Applicant contended he was employed under the Airport Employees Award 2020 (the Award) (then the Airport Employees Award 2010), and as such there was an obligation to consult him regarding redundancy.

[33] At the Hearing, the Respondent disagreed that the Applicant was covered by an Award, but did not press this objection as it considered it had consulted the Applicant regardless. The Applicant did not provide more than a bare assertion regarding coverage, however, I have examined the Award and do note that there is a classification for Professional Engineers that would encompass his role as Project Manager.

[34] Clause 9 of the Award sets out the requirements for consultation regarding major change:

9. Consultation about major workplace change

9.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:

(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and

(b) discuss with affected employees and their representatives (if any):

(i) the introduction of the changes; and

(ii) their likely effect on employees; and

(iii) measures to avoid or reduce the adverse effects of the changes on employees; and

(c) commence discussions as soon as practicable after a definite decision has been made.

9.2 For the purposes of the discussion under clause 9.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:

(a) their nature; and

(b) their expected effect on employees; and

(c) any other matters likely to affect employees.

9.3 Clause 9.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.

9.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 9.1(b).9.1

[35] It is uncontroversial that redundancy and termination of employment fall within the definition of major workplace change, as set out under the Award. The Respondent was therefore required to consult the Applicant.

[36] The evidence provided by the Respondent demonstrated that the organisation had provided a series of emails to employees. In emails dated 16 March 2020, the Respondent advised that QAL’s Crisis Management Team had been stood up and were meeting daily and also a COVID-19 working party had been established and were also meeting daily. It outlined a number of restrictions being imposed and stressed that this pandemic was a period of great uncertainty and the business was working through how to best manage through the crisis. The CEO wrote again on 18 March 2020, presenting information on the impact to flight capacity – that Qantas and Jetstar were going to cut domestic capacity by 60% and Virgin and Tiger by 50% and flagged that “clearly we can no longer sustain current levels of expenditure, both operating and capital” and further stating that “they will have to take significant action to protect the business.” On 20 March 2020, the CEO wrote again to QAL Group employees and stated that, following a board meeting the previous evening, key elements of the organisations strategy to reduce expenses during a period of markedly reduced revenue as it relates to the employees were: reduced working hours, standing down of employees and redundancies and flagging that every employee will have an individual discussion in the following week.

[37] The Applicant had a scheduled individual meeting that involved a line manager personally and an HR representative who was on Zoom. During the meeting the Applicant was appraised of the decision that, as a result of severely curtailing spend on capital works, his role was no longer required. They provided the rationale and made clear to the Applicant that this was not a result of any performance concerns. This was validated in the termination paperwork where it stated that they would rehire him again. At the meeting he was asked if he had any questions or suggestions. The organisation did consider the Applicant’s suggestions; however, they could not accommodate his request. Subsequently to the meeting, the Respondent also considered further matters raised, one of them being the Applicant’s concern that his termination pay was not calculated properly, and he was due a severance amount based upon a redundancy. The Respondent rectified the severance amount promptly. The errors in the severance quantum and the characterisation do not diminish the facts which are that his role was no longer required.

[38] The Respondent informed Mr Owens of the impact of the pandemic soon as a decision was made and the organisation convened individual meetings with affected workers to discuss the outcome of the decision and its impact on those that were leaving the organisation. Due to the numbers of employees affected and the pandemic not all the communications were face to face. The initial meeting had the HR delegate being on Zoom and the local manager located with the Applicant.

[39] I am satisfied that the employer met their obligations regarding consultation under the Award. The emails sent by the CEO outlined the business impacts of the pandemic as it evolved and what the likely impacts may be and how the organisation was responding. The emails did identify with increasing granularity the nature, expected effect and more general information to assist employees during this period of major workplace change. significant change. Given the scope of the operational response, it is understandable the numerous employees – all being faced with an identical set of prospects – were informed as a group.

Was it 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?

[40] Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal. 6 In determining whether redeployment was reasonable a number of matters may be relevant, including:

•  whether there exists a job or a position or other work to which the employee can be redeployed;

•  the nature of any available position;

•  the qualifications required to perform the job;

•  the employee’s skills, qualifications and experience, and

•  the location of the job in relation to the employee’s residence and the remuneration (pay and entitlements) which is offered.

[41] The question of whether redeployment would have been reasonable must therefore be applied at the time of the dismissal on 24 March 2020. The evidence from the respondent was that there were no vacancies at this time, given the respondent was making significant reductions in the workforce this is not unexpected. Further, a recruitment freeze was in place, which is also not unsurprising given the calamitous reductions the Respondent was facing.

[42] The Applicant asserted that there was a role that he could have been redeployed into, the AMRO role. This role however, which is required under aviation regulations and arose unexpectedly, was not available at the time of his dismissal.

[43] I am satisfied that redeployment was not available in this instance and the employer had fulfilled their obligations under s.389(2).

Conclusion

[44] I am satisfied that the dismissal was a genuine redundancy under s.389 of the Act. The Applicant is therefore not a person protected from unfair dismissal and the application must be dismissed. There is no need to consider the merits of this matter.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1 Respondent’s Submissions on Jurisdiction, [14]-[15].

 2   Jones v Department of Energy and Minerals [1995] IRCA 292 (16 June 1995), [(1995) 60 IR 304 at p. 308 (Ryan J)]; cited with approval in Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488 (Boulton J, Drake SDP, McKenna C, 10 May 2010) at para. 17, [(2010) 196 IR 32]

 3   Ibid

 4   [2010] FWA 674

 5   [2010] FWA 5676

 6   Ulan Coal Mines Limited v Honeysett [2010] FWAFB