Xayne Toweel v Eduss Asia Pacific Ltd
[2013] FWC 3293
•24 MAY 2013
[2013] FWC 3293 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Xayne Toweel
v
Eduss Asia Pacific Ltd
(U2013/7873)
COMMISSIONER SPENCER | BRISBANE, 24 MAY 2013 |
s.394 - application for unfair dismissal remedy - jurisdictional objection - genuine redundancy - s.385(d) - meaning of genuine redundancy
Introduction
[1] This decision relates to an application made by Mr Xayne Toweel (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy on the grounds that the termination of his employment from Eduss Asia Pacific Ltd (the Respondent/the Employer) was harsh, unjust and or unreasonable. The Respondent in this matter has raised a jurisdictional objection (the jurisdictional objection) to the application alleging that the dismissal was a case of genuine redundancy. This decision relates to the jurisdictional objection only.
[2] The Respondent requested that the jurisdictional objection be determined prior to conciliation of the substantive matter.
[3] The matter was listed for a Directions conference on 27 May 2013. The Applicant was represented by Mr De Korte of De Korte Lawyers. The Respondent was represented by Ms Ryan of Aitken Wilson Lawyers. As a result of this conference the parties were provided with an opportunity to file additional material. However they consented to the jurisdictional objection being determined on the papers that is on the basis of the material filed by the parties to date, and the submissions made during the conference.
[4] It is noted that whilst not all of the material and submissions in this matter have been referred to all of such have been considered in making the decision.
Background
[5] The Respondent is an education solution specialist that provides interactive hardware technologies, software solutions, training and development, installation and support.
[6] The Applicant commenced employment with the Respondent on 16 March 2009 as a full time Sales Executive. It is the evidence of the Respondent that the Applicant was not well suited to this position and that prior to the completion of his probation period as a Sales Executive he transferred roles and commenced as a Technologies Installer.
[7] The Applicant stated that he received a notice of termination, by email, on 27 February 2013 (the redundancy email). The redundancy email was sent to the Applicant and the other Installer under the hand of Mr Tony Church, Chief Executive Officer of the Respondent. The subject of the email is “[D]ownturn in requirement for installation services”.
[8] The redundancy email advised the two employees concerned that over the past twelve months the business had experienced a “substantial downturn” in the need for installation services. The redundancy email further stated that “it has been determined” that a minimum of 32 installations are needed by “an installation team on a monthly basis”. According to the redundancy letter the average installations over the last 8 months had dropped to 5.5 per month.
[9] The redundancy email advised that, the Respondent had previously discussed these figures with “you” (the Applicant).
[10] It is relevant to set out the remainder of the redundancy email in full which stated:
“Based on figures over the last 8 months a decision has been made the Eduss is no longer able to sustain the current level of full time installation employees. We are looking to restructure and change the way our installations are offered to customers and performed by our company. Significant effects including the termination of employment will be the result of this decision. In light of the substantially reduced demand for installation services and size of our business it is considered that redeployment of staff will not be possible.
We will notify employee/s affected by these changes within the near future. Should any employee wish to discuss the proposed changes or require further information please contact me to arrange an appointment.”
[11] The Respondent stated that the Applicant’s position was then made redundant by letter of 4 March 2013.
[12] The Applicant referred to some correspondence between the Applicant and Mr Church regarding issues that the Applicant wished to raise concerning alleged underpayments, issues with time off in lieu and an alleged workplace injury. An exchange of two emails was provided. From the terms of the emails, it appears that the issues have been ongoing and in the Respondent’s view had been dealt with on prior occasions.
[13] It is important to note that the application is not an application pursuant to Part 3-1 of the Act concerning an alleged contravention of the general protections provisions. The Applicant placed some reliance on the fact that he raised “work place concerns” as a reason for his being selected for redundancy. The Applicant also raised the exercise of a workplace right, an entitlement to claim for workers compensation as a relevant matter. These issues, alleging a contravention of a workplace entitlement are within the jurisdiction of general protections matters, such an application has not been made. An additional application dealing with the dismissal, pursuant to s.365 of the Act cannot be on foot at the same time as an application pursuant to s.394 of the Act. 1
Relevant Provisions of the Legislation
[14] The substantive application has been made pursuant to s.394 of the Act. Section 394 provides as follows:
“394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.
Note 1: Division 4 sets out when the FWC may order a remedy for unfair dismissal.
Note 2: For application fees, see section 395.
Note 3: Part 6 1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.
(2) The application must be made:
(a) within 21 days after the dismissal took effect; or
(b) within such further period as the FWC allows under subsection (3).
[15] It is not in dispute that the application was filed within the time prescribed by s.394(2)(a).
[16] Section 382 of the Act provides as follows:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[17] Section 389 provides the for the meaning of genuine redundancy:
“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.
[18] The relevant consideration in relation to the jurisdictional objection is s.385(d).
Summary of the issues between the parties
[19] The Respondent referred to the prior specific discussions and documentation regarding the required number of installations to maintain the viable operation of this business unit as the basis for the redundancy. In response to the Applicant’s submission, the Respondent also explained the basis on which mobile installations were not included as appropriate, for the required installation numbers.
[20] The Respondent relied on the analysis of the installations required, which was put to the Applicant in setting out the considerations as to why there was insufficient ongoing work. In addition to this they referred to their email to the Applicant in justifying the consultations that had occurred with the Applicant, regarding the future of his role. On the material the basis for the decision to make the Applicant redundant was clear.
[21] In response to the Applicant’s lengthy letter of demand provided to the Respondent, the Respondent referred the Commission to the terms of correspondence between the legal representatives for the parties, prior to the unfair dismissal application. The Respondent’s response to the Applicant’s representative contained some further clarification on how the downturn in work was relied upon.
[22] The Respondent submitted that in January 2012, over a year prior to the redundancy of the Applicant, the Respondent had a meeting with the Applicant to discuss the required average of 32 installations per month to justify the in-house installation operations of the Respondent.
[23] The Respondent’s material identified that the Applicant did not complete “approximately 50” installations in the two months prior to his dismissal as he asserted. The Respondent stated that in January the Applicant completed 11 installations and 10 relocations, in February 6 installations and 5 relocations.
[24] As to the operations of the Respondent, in so far as mobile technologies are concerned the Respondent submitted that the classification by the Applicant, of such work, as installation work is misleading.
[25] The Respondent submitted that consideration was given to the redeployment of the Applicant. The Respondent submitted however that, contrary to the Applicant’s submission, he was not considered suitable or held sufficient skill for the positions that he identified. The Applicant referred to the possibility of redeployment in a sales position, however this was the original area where he was employed and found by the Respondent not to be suitable for that work. Accordingly his position in sales was amended for the installations role.
[26] In regard to the jurisdictional objection, the Applicant referred the Commission to various matters including some evidence regarding the success and growth of the Respondent, and the fact that Mr Anthony Church (Junior) still remains with the Respondent as an Installer.
[27] The Applicant refuted the assertion in the redundancy email that the average installations over the past 8 months had been 5.5 per month. The Applicant submitted that he recalled doing approximately 50 installations in the two months prior to dismissal. The Respondent set out that this figure did not correlate with the actual installations completed.
[28] The Applicant submitted that the reliance of the Respondent on the increase in demand for mobile products was misleading. The Applicant submitted in this regard that even mobile products require some work by the installation team, before the product is delivered to the client, and should be included in installation numbers. The Respondent argued that this procedure could not be regarded as satisfying installation work.
[29] In so far as redeployment is concerned the Applicant identified two positions that are vacant, due to resignations, that occurred prior to the Applicant’s dismissal. The Respondent did not consider the Applicant as being suitable for alternative positions and further that there had not been any other person reemployed in the Applicant’s role.
[30] The Applicant further stated that he had never had any verbal or written warnings from the Respondent in relation to his performance or conduct. The issue under consideration in his termination only related to the issue of installation numbers.
Considerations
s.389(1)(a) - No longer required to be done
[31] When a person’s job is no longer required to be performed by anyone is not an absolute consideration. The Explanatory Memorandum to the Fair Work Bill relevantly provides:
“Clause 389 – Meaning of genuine redundancy
- a machine is now available to do the job performed by the employee;
- the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
- the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.
1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.
1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548. The following are possible examples of a change in the operational requirements of an enterprise:
1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.
1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.
1551.Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.
1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal...”
[32] The Respondent provided the background to the Applicant’s post-dismissal assessment that a greater number of installations were being undertaken than recorded by the Respondent:
“The respondent advised Mr Toweel’s representatives in writing that the representation that this data provides an evidentiary basis for the assertion that installations had not decreased is incorrect and without merit. The following information was given to Mr Toweel in writing on 21 March 2013 and is reiterated herein.
In January 2012 our client (the respondent) used data including that available on the Google Calender System to calculate the comparative costs of the provision of installation services when provided by external subcontractors as opposed to two full time employees;
It was then calculated that to cover costs associated with the provision of services by two full time employees and achieve no net loss or gain, it was necessary to complete thirty two installations per month;” 2
[33] The Respondent stated that:
“We reiterate that in January 2012 Mr. Anthony Church...Director of the respondent, had a meeting with Ian Jackson, Operations Manager, and Mr Toweel. During the course of this conversation Mr Church discussed in detail the need for the respondent to perform an average of 32 installations per month to warrant having its own installation team as appose to using external contractor.“ 3
[34] An extract from the spreadsheet upon which the calculation of 32 installations was made was provided in submissions. The Respondent stated:
“At [the] time these calculations were conducted the respondent was averaging 36.83 installations per month, resulting in a 13.74% profit on installation services” 4
[35] The Respondent asserted:
“Mr Toweel has now asserted that he “recalls doing approximately 50 installations in the two months prior to the dismissal”. This claim is both incorrect and misleading. The total number of installations done from 1 January 2013 to 28 February 2013:
● January: -11 x Installations and 10 x relocations of which 8 were whiteboards only charged out at 30% of normal rates; and
● February: 6 x installations and 5 x relocations
Mr Toweel was informed of the number of installations needed to be undertaken to ensure profitability of installation services within the business. Both his recollection and all figures presented by the respondent support the fact that monthly installations were below this threshold. It would appear that Mr Toweel’s position is that the respondent was not entitled to maintain profitability in sections of its enterprise and should have operated its installation services at a loss regardless of the obvious detrimental effects to the business.
Mr Toweel then purports to assert that the assembly of mobile products are classified as installations. This is an extremely deceptive assessment of the respondent’s conduct of its business and the scope of Mr Toweel’s duties.
Mobile solutions are predominantly assembled at the respondent’s premises and then delivered to customers. The delivery includes commissioning of the units on site and giving the customer a brief overview on how the unit works. On-site training is then conducted by an employee referred to as a Trainer within a two week period of the delivery date. Mobile products for more remote customer locations are assembled either by sub-contractors at an average rate of $180.00 (including travel) or in some cases customers undertake to do the assembly themselves. The respondent does not require an installation team to assemble mobile units.
As a result in the decreased demand for installations and the shortfall of work available for the installation team, installers (including Mr Toweel) were tasked to conduct assemblies on occasion. This was not a core function of instalment staff nor could the process of assembly be described as an instalment in relation to the business practices engaged in by the respondent.” 5
[36] The business case and discussions on this between the parties confirmed the basis for the resultant redundancy. On the basis of the material before the Commission, it is determined that the Respondent no longer required the Applicant’s job to be done due to the operational changes to the Respondent’s business.
s.389(1)(b) - Consultation
[37] The obligation to consult is not an absolute obligation to consult. The Full Bench in Ulan Coal Mine Limited v Henry Jon Howarth and others said:
“We do not consider, in the particular circumstances of the present matter and having regard to the obligation under sub-clause 23.1 of the Agreement, that a further round of discussions was required to be held by the Company with the employees to be dismissed, either separately or as a group. This does not mean that such separate discussions might not be worthwhile and appropriate e.g. as part of the consideration of measures to mitigate the adverse affects of terminations or to ensure that opportunities for other employment and assistance are properly examined. However they are not part of the discussions envisaged and required under sub-clause 23.1 of the Agreement and that is the test in these particular circumstances. In different circumstances this will of course vary according to the terms of particular awards and agreements.” 6
[38] The obligation to consult is to be discharged in accordance with the obligations in the provision of relevant industrial instruments. The test in relation to consultation in this matter arises from the relevant industrial instrument’s clause. The parties did not refer to a relevant clause but the Respondent detailed the early nature of the consultation including the provision of information regarding the number of installations required to allow for the continuation of the second technology installer role.
[39] The Respondent submitted that consultations were held as early as January 2012 in regard to the performance target required to ensure ongoing viability and to allow the Respondent to continue to employ full-time employees:
“...Staff were informed that in order for the employment of two full time installers to be financially viable, a minimum of thirty two (32) installations per month were required to be performed.
Mr Church recollects having several informal discussions with Mr Toweel throughout in relation to the reduced number of installations performed by staff and the minimum target figure of thirty two installations per month. As a small business this type of consultation between staff regarding productivity and areas of concern was not unusual.
Installation staff were notified in writing on 27 February 2013 of the downturn in demand for installation services, proposed operational restructuring and significant effects for employees including termination. An invitation was extended to employees to engaged in further discussions and Mr Church undertook to arrange upon request personal meetings to facilitate the provision of any further information required by employees.
Mr Toweel did not avail himself of these opportunities during the period of approximately one week prior to his termination by way of redundancy. During this time Mr Toweel did not seek constructive consultation with the respondent but was extremely vocal in relaying threats of legal action and that he would “take them (the respondent) for everything they have”.
The respondent notified the applicant of the redundancy on 4 March 2013 as soon as was practicable after a definite decision was made by the respondent in relation to the same...” 7
[40] The Respondent had discharged their consultation obligations. Further, the Applicant did not specifically allege any failure (on the Respondent’s part) to consult.
s.389(2) - Redeployment
[41] In Ulan Coal Mines Limited v Honeysett and other 8 the Full Bench said:
“The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the role, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.” 9
[42] Further the Full Bench said:
“It is an essential part of the concept of redeployment under s.389(2) that a redundant employee be placed into another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard...” 10
[43] One the material provided it was not reasonable for the Applicant to be redeployed.
Conclusion
[44] Where the Respondent raises a jurisdictional objection, the onus is on the Respondent to satisfy the Commission of their case. 11
[45] The Respondent has established that the dismissal was a case of genuine redundancy and that appropriate consultation and explanations were provided in the lead up to the decision with the Applicant. The Applicant was consulted with regard to the installation numbers. 12 No persuasive argument for redeployment in rebuttal of the Respondent’s reasoning was made out by the Applicant.
[46] The Applicant’s termination was a case of genuine redundancy in accordance with s.389 of the Act. The Applicant was not unfairly dismissed. The jurisdictional objection is upheld.
[47] The application made pursuant to s.394 of the Act is dismissed. I Order accordingly.
COMMISSIONER
1 Fair Work Act 2009 (Cth) s.725.
2 Form F4 Objection to Application for Unfair Dismissal Remedy, filed 10 April 2013, at paragraph 11.
3 Ibid at paragraph 12.
4 Ibid at paragraph 13.
5 Ibid at paragraphs 14-18.
6 [2010] FWAFB 3488 at [31].
7 Form F4 Objection to Application for Unfair Dismissal Remedy, filed 10 April 2013, at paragraphs 20-24.
8 [2010] FWAFB 7578.
9 Ibid at [28].
10 Ibid at [30].
11 Crema and Others v Abigroup Contractors[2012] FWA 5322, Commissioner Cribb, at [81].
12 See for example Govinda Prasad Dhungel v The Baking Company Australia Pty Ltd[2012] FWA 4717, Deputy President Sams; Eva v Victorian Radio Network Pty Ltd [2007] AIRC 814, Commissioner Eames.
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