[2012] FWA 4917 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Sirin Steele
v
Ennesty Energy Pty Ltd T/A Ennesty Energy
(U2012/5321)
COMMISSIONER JONES |
MELBOURNE, 21 JUNE 2012 |
Unfair Dismissal - Genuine Redundancy.
Introduction
[1] The Applicant, Mrs Sirin Steele has made an application for relief from unfair dismissal under s.394 of the Fair Work Act 2009 (the Act).
[2] The Applicant’s employment was terminated on 22 February 2012 when her position, Estimator/ Bids Manager, was made redundant.
[3] The nature of the Respondent’s business and the circumstances leading to the Applicant’s position being redundant were described as :
“The Respondent manufactures/assembles and delivers electrical equipment and supplies expert trade labour services to the energy sector. In May 2011 the Respondent employed 65 people. By May 2012 the Respondent employed 47 employees. During 2010 the Respondent’s financial position deteriorated and it posted a trading loss of over $500,000 in the 2010/2011 financial year. The Respondent’s financial position prompted a restructure from around June 2011 till February 2012.” 1
Background
[4] The background to the Applicant’s employment with the Respondent is that in or around May 2010, the Managing Director, Mr Nigel Turner decided to employ an Estimator/ Bid Manager, a new position taking over the functions of estimating/ quoting he was performing in his business. Ms Danielle Turner, the Respondent’s System Co-ordinator/HR Manager interviewed the Applicant, following which the Applicant commenced employment on 21 July 2010. At the time of the Applicant’s dismissal, her salary was $87,500 per annum. 2
[5] There is no dispute that the Applicant is a protected person within the meaning of s.382 of the Act and that the Respondent is not a small business.
Legislation
[6] S.385 of the Act provides:
385 What is an unfair dismissal
A person has been unfairly dismissed if FWA 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.
[7] S. 389 of the Act provides:
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.
[8] The Respondent does not submit that the dismissal was a case of genuine redundancy within the meaning of s.385(d) on the basis that it accepts that the consultation it engaged in with the Applicant, did not comply with the obligations in the relevant modern Award.
[9] Having considered the evidence in relation to the consultation engaged in by the Respondent (see below), I am satisfied that the dismissal was not a case of genuine redundancy within the meaning of s.389 of the Act.
[10] This means that the matter remaining to be determined is whether the Applicant’s dismissal was harsh, unjust and unreasonable: s.385(b).
[11] S.387 of the Act provides:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.
[12] I am satisfied that in the circumstances where a person is dismissed because of redundancy the relevant matters I must take into account are those specified are subsections (d), (f), (g) and (h) of s.387 of the Act. It is to be noted that, in this matter, no issue was raised as to ss.387(d).
[13] Whilst the Respondent does not submit that the dismissal is a case of genuine redundancy dismissal, the adequacy of consultation and whether redeployment was reasonable in the circumstances were the key issues in dispute.
[14] The Applicant’s and Respondent’s Submissions and evidence will be considered in relation to these key issues in dispute.
Consultation - Sub-sections 387(f) and (g)
[15] The Applicant maintains that the consultation engaged in was inadequate and this procedural failure, in particular the failure of the Respondent to provide the Applicant with all relevant information in writing regarding the Respondent’s organisational restructuring, redundant positions and the new restructure, denied the Applicant the opportunity to focus on a new/vacant role and hence opportunity for redeployment. 3
[16] The Respondent submits it engaged in “extensive” consultation 4 and the Applicant was consequently afforded procedural fairness in relation to the declaration that her position was redundant.
[17] Having considered the evidence I am satisfied that the following fairly summarises the consultation process:
a. On 2 February 2012, Mr Turner met with the Applicant. The Applicant’s evidence is that she was told by Mr Turner that the meeting was to discuss performance and where the business was at. Mr Turner’s evidence is that he told the Applicant the meeting was about where the business was heading. In any event, the evidence is that at the meeting Mr Turner outlined the difficulties facing the Respondent’s business, the level of the success rate of the Applicant’s tenders and that consequently the Applicant’s role may become redundant. The Applicant was requested to provide options for other positions she could fulfil to achieve a reduction in costs. 5
b. On 2 February 2012 at 10.19am, an email was sent by Ms Turner to various recipients, including the Applicant, attaching a position vacancy for an Electrical Trades Assistant in the Respondent’s Cubicles Department. Ms Turner’s evidence is that this email was sent to the Applicant as information sharing and was sent by her prior to being aware Mr Turner had formed the view that the Applicant’s role may be redundant. 6
I am satisfied, having regard to the evidence, that the email cannot be considered to be part of the consultation process. This issue of this vacancy is, however, relevant to the issue in dispute regarding redeployment (see below).
c. On 6 February 2012, the Applicant sent Mr Turner an email setting out “solutions as to how you could utilise my skill set in other areas of the business in a cost saving nature”. 7 The three solutions for redeployment proposed by the Applicant were Project Management Support and Administrative work; Estimator/Bid Managers and Admin Support; Administrative Role.
d. On 7 February 2012, Mr Turner met with the Respondent’s Management Team during which the Applicant’s proposed solutions were discussed. Mr Turner’s evidence of the discussion is:
“We considered all three proposals would result in the same outcome, that being the termination of two full time administration employees (Payroll Officer and Account Officer) and the replacement of these full time employees with the Applicant. We considered these options, but determined that this exposed the Respondent to legal risk because the Payroll Officer and Account Officer positions technically would not be true redundancies. We also considered the Applicant’s proposals were not practical as it would require one inexperienced and unsuitably qualified person to perform tasks that were currently being performed by two experienced and suitably qualified employees (the Account Officer and Payroll Officer who hold Masters Degrees in Commerce and Accounting respectively). As the Applicant’s salary was close to double of that of each administrative employee, we considered her proposals not viable.” 8
The Management Team resolved to make the Applicant’s position redundant. 9
e. On 16 February 2012, Mr Turner met with the Applicant. There is some dispute as to what was precisely said at the meeting. In essence, it is apparent Mr Turner advised the Applicant her proposed solutions were not acceptable, that he had considered a vacancy, the Business Unit Manager, but decided the Applicant was not satisfactorily qualified for the position and that, consequently the Applicant’s employment was terminated. The Applicant was given a letter dated 16 February 2012, signed by Mr Turner, terminating her employment. 10
[18] The Respondent relies on a record of an Employee Exit Interview conducted by Ms Turner with the Applicant which records that the Applicant stated, “very happy with exit process and thought it was fair. Looking forward to working with husband.” 11 The Applicant agreed that she had said the exit was fair but she was trying not to be too negative and that she, “really only thought about the way people around me, my colleagues, were treating me on a day to day basis. I didn’t think about the redundancy process when I answered the question.”12 I do not find the explanation of the Applicant convincing in respect of her response at the exit interview. Having considered the evidence of the Applicant and Ms Turner, I am satisfied that the Applicant stated that thought the redundancy process was fair.
[19] In determining whether the consultation process engaged in by the Respondent had the consequence that the Applicant’s dismissal was unreasonable I have had particular regard to subsections s.387(f) and (g) of the Act.
[20] I am satisfied that it is accepted principle that consultation should be meaningful and not merely an afterthought or engaged in after an irreversible decision has been made: Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company Ltd (1988) 88 IR 202.
[21] I am satisfied that Mr Turner engaged in consultation prior to the irreversible decision on 7 February 2012 to terminate the Applicant’s employment.
[22] In my view the consultation was limited and certainly not ‘extensive’. However, I have taken into account the size of the Respondent’s enterprise at the time, being around less than 50 employees 13 and the fact that, whilst Ms Turner was a System Co-ordinator/HR Manager, she worked 2 days a week for the Respondent.14
[23] Moreover, I am satisfied that any deficiencies in consultation did not, as the Applicant asserts, affect the reasonableness of the Respondent’s actions to redeploy the Applicant (see below).
[24] Having regard to the size of the Respondent and the absence of a dedicated human resources expertise, I find that the consultation did not have the consequence that the Applicant was denied procedural fairness.
Any other relevant matters - Sub-section 387(h)
[25] The key matter raised by the Applicant in submitting that her dismissal was unfair was the failure of the Respondent to offer to redeploy her in two positions in the organisation which were vacant at the time she was made redundant. These were:
• Unit Manager - Building position; and
• Electrical Trades Assistant position.
[26] I am satisfied that a relevant matter to take into account in determining whether a dismissal was unfair in circumstances of redundancy is whether it would have been reasonable for the Respondent to redeploy the employee into vacant positions with the Respondent’s organisation. This is so, even where the dismissal is not a case of genuine redundancy within the meaning of ss.385(d).
[27] The observation of the Full Bench in Ulan Coal Mines Ltd v Honeysett & Ors 15 in relation to s.389(2)(a) of the Act are instructive in considering the reasonableness of the steps taken by the Respondent to redeploy the Applicant:
“[34] It may be appropriate to make some concluding remarks about the operation of s.389(2). It is an essential part of the concept of redeployment under s.389(2)(a) that a redundant employee be placed in 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. The outcome of that application would depend upon a number of other considerations.” 16
The Unit Manager - Building Position
[28] The Applicant submits that she was suitable to fill this position. She maintained that at the meeting on 16 February 2012 there was no discussion of this role and she would have accepted this role if it were offered to her. 17 The Applicant referred to her qualifications as an Electrical Engineer and her current study for a Master of Entrepreneurship and Innovation, her prior experience in project management, hands-on experience in electrical wiring as a skill set which, with appropriate training, made her suitable for the position.18
[29] Mr Turner’s evidence in relation to Unit Manager - Buildings position was that the position involved ‘managing the department that was at that time giving us the most financial grief. So it was a position that I could not attempt to just give it a go. I had to get the right person for the job.’ 19 Mr Turner explained:
“There were certain skills and experience that was required to manage that business unit. It went a lot deeper than just being project management based, except there was a lot of people management that needed to be done. There was a lot of strategic planning and process change that needed to occur. There was a lot of performance issues that needed to be dealt with the staff in that business unit. Those skills is what I viewed as being lacking from Sirin’s experience, hence that’s why she was considered but I did not think she was a fit person to fulfil that position.” 20
[30] In essence Mr Turner’s evidence was that he was looking for a person with a general management and strong operational role with established skills and human resource management to step into the role and effectively manage an area which had suffered losses impacting on the business’ viability which was characterised by significant performance issues.
[31] There is no doubt that the Applicant has high level engineering skills, is motivated and there is no question she performed her role as Estimator/Bid Manager competently and professionally.
[32] However, I was impressed with the evidence given by Mr Tuner as owner/manager of a business struggling to survive and dependent on filling a position in an area which had been placing undue ongoing pressure on the business.
[33] I am satisfied that the vacant position, Unit Manager - Buildings required, given the circumstances of the business, a person with high level managerial skills including an immediate capacity to address performance issues and other operational issues affecting the Respondent’s financial performance.
[34] I am not satisfied that the position was therefore suitable employment for the Applicant given the imperatives of the business.
[35] I find, therefore, that the failure of the Respondent to redeploy the Applicant in the vacant position Unit Manager - Buildings, was not unreasonable in the circumstances.
Electrical Trades Assistant Position
[36] The focus of the Applicant’s closing submission was on the failure of the Respondent to offer the Electrical Trades Assistant position to the Applicant.
[37] The relevant extracts from the Respondent’s advertisement for the vacancy are:
“We are currently seeking an Electrical Trades Assistant to join our team to perform and coordinate several workshop based tasks including:
• Cubicle construction and hardware installation
• Management of Inward/Outward Goods including wrap/pack and loading/unloading
• General housekeeping
To be successful in the roll you will have:
• Intermediate computer skills
• Demonstrated experience in a relevant technology such as Construction or Electrical
• Basic understanding of technical drawings
• Ability to work autonomously and within a team environment
• Good communication and organisational skills
• Initiative
• High work ethic” 21
[38] The Respondent emphasized that the position was a physical one, involving the use of tools, lifting on a regular basis up to 20kg and working in confined spaces. 22 Ms Turner, nevertheless, stated the Applicant could have performed the position with appropriate training,23 however, it had never occurred to her to offer the Applicant the position as, in her view the Applicant’s position and this vacancy were “like chalk and cheese.”24
[39] The Applicant’s evidence was that the position was not one in normal circumstances she would be interested in. However she was, by the time her position became redundant, pregnant and she would have preferred this position “than the prospect of no employment until I am due to give birth.” 25
[40] It is not in dispute that the position of Electrical Trade Assistant involved a significant reduction in remuneration compared to the Applicant’s former position - a reduction from $87,000 per annum to around $50,000. 26 It is also clear that in her former position, Ms Steele, worked in an office based environment.
[41] The fact that new or vacant positions are at a lower level of remuneration than an employee’s redundant position, does not necessarily absolve an employer from offering the employee redeployment. 27
[42] The question whether it is reasonable to offer a position as redeployment thereby avoiding termination must have regard to not merely the employee’s skills and competence to perform the new position (taking into account training) but other considerations.
[43] Taking into account, in particular, the significant reduction in remuneration (around $37,000 per annum) and the vastly different working environment from office based work to factory floor work, I am not satisfied, notwithstanding the Applicant’s skills and competence to perform the role, that it was reasonable to redeploy the Applicant into the position of Electrical Trades Assistant.
[44] I find that the failure of the Respondent to offer the position of Electrical Trade Assistant was not unreasonable.
Conclusion
[45] I am satisfied that the Applicant’s dismissal arose from the restructure of the Respondent’s operations in the context of severe financial pressure which resulted in the Applicant’s position being redundant.
[46] I am further satisfied for the reasons set out above that taking into account the size of the business and limited human resources expertise the consultation, which was limited, did amount to procedural unfairness. As is apparent from my findings in relation to redeployment, any deficiencies in the process had no real impact on the capacity for the Applicant to be redeployed.
[47] I have found that the issue of redeployment is a relevant matter to be considered under s.387(h) of the Act in determining whether a dismissal was harsh, unjust or unreasonable. I have found that the failure of the Respondent to offer the Applicant either of the vacant positions of Unit Manager - Buildings and Electrical Trades Assistant in the Respondent’s business was, having regard to all the circumstances, not unreasonable.
[48] In all the circumstance, I find that the Applicants dismissal was not unfair. The application is dismissed and an Order to this effect will be issued today.
COMMISSIONER
Appearances:
Mr G. Dirks - Representative of the Applicant
Mr M. Richie - Representative of the Respondent
Hearing details:
2012
Melbourne
June, 4
1 Respondent’s Outline of Submission, Exhibit R4 at [1]
2 Witness Statement of Nigel Turner, Exhibit R1 at [10]
3 Applicant’s Closing Submission, Exhibit D4 at [4] - [12]
4 Respondent’s Outline of Submission, Exhibit R4 at [2]
5 Witness Statement of Nigel Turner, Exhibit R1 at [29]; Witness Statement of Sirin Steele, Exhibit D2 at [24] - [31]; Transcript of Hearing - 4 June 2012 at [87] - [98], [290] - [291].
6 Transcript of Hearing - 4 June 2012 at [479] - [482]
7 Witness Statement of Nigel Turner, Exhibit R1, Attachment “NT-12”
8 Ibid
9 Ibid at [32]
10 Witness Statement of Nigel Turner, Exhibit R1 at [36] - [40]; Witness Statement of Sirin Steele, Exhibit D2 at [34] - [38]. Transcript of Hearing - 4 June 2012 at [54], [103] - [104], [117] - [123]
11 Witness Statement of Danielle Turner, Exhibit R2, Attachment “DT-4”
12 Transcript of Hearing - 4 June 2012 at [216]
13 Witness Statement of Nigel Turner, Exhibit R1 at [7]
14 Witness Statement of Danielle Turner, Exhibit R2 at [1] - [2]
16 Ibid at [34]
17 Transcript of the Hearing - 4 June 2012 at [54] - [55]
18 Witness Statement of Sirin Steele, D2 at [6] to [19]
19 Transcript of Hearing - 4 June 2012 at [293]
20 Transcript of Hearing - 4 June 2012 at [305]
21 Witness Statement of Danielle Turner, Exhibit R2, Attachment “DT-3”
22 Transcript of Hearing - 4 June at [430]
23 Transcript of Hearing - 4 June 2012 at [492]
24 Ibid
25 Witness Statement of Sirin Steele, Exhibit D2 at [58]
26 Transcript of Hearing - 4 June 2012 at [702] to [704]
27 See Lindsay v Department of Finance and Deregulation [2011] FWA 4078 at [144]
Printed by authority of the Commonwealth Government Printer
<Price code C, PR524944>