1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Karan Bhalla
v
Welltech Total Water Management
(U2014/8268)
COMMISSIONER CLOGHAN PERTH, 29 OCTOBER 2014
Unfair dismissal - jurisdictional objection - genuine redundancy.
[1] On 10 July 2014, Mr Karan Bhalla (Mr Bhalla or Applicant) made application to the
Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from his
former employer, Welltech Total Water Management (Employer).
[2] The application was made pursuant to s.394 of the Fair Work Act 2009 (FW Act).
[3] The application was referred to me on 28 August 2014.
[4] In response to the application, the Employer asserts that:
the Applicant’s dismissal was a case of genuine redundancy.
[5] To assist in the determination of whether Mr Bhalla’s dismissal was a case of genuine
redundancy, I issued Directions and advised the parties that I intended to deal with the matter
by way of written submissions. In addition, each party was given the opportunity of a hearing
to challenge the submissions or affidavits. Neither party sought a hearing.
[6] This is my decision and reasons for decision on whether the Applicant’s dismissal was
a case of genuine redundancy and therefore not protected from the unfair dismissal provisions
of the FW Act.
RELEVANT STATUTORY FRAMEWORK
[7] Section 385 of the FW Act sets out the meaning of unfair dismissal as follows:
“(a) the person has been dismissed; and
(b) ... and
(c) ... and
(d) the dismissal was not a case of genuine redundancy.”
[8] The meaning of genuine redundancy is contained in s.389 of the FW Act as follows:
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DECISION
E AUSTRALIA FairWork Commission
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“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.”
[9] Shortly put, where it is found that a dismissal is a genuine redundancy, it is not an
unfair dismissal.
RELEVANT BACKGROUND
[10] Mr Bhalla commenced employment on 21 January 2013.
[11] Mr Bhalla was employed as the Employer’s Western Australian Engineering Manager.
[12] On 9 July 2014, Ms J Bennett, the Western Australian General Manager, met with
Mr Bhalla “and informed him [that] his employment with Welltech would cease due to the
lack of work for an Engineer at Welltech”.
[13] Mr Bhalla evades a response to the Employer’s statement of fact above in paragraph
[12] and simply asserts “I had not notice that this was a meeting where I would be dismissed”.
[14] Ms Bennett asserts that at the meeting on 9 July 2014, “Mr Bhalla agreed that there
was no Engineering management work at Welltech for which he was suited and accepted that
his termination had nothing to do with his work performance”. Mr Bhalla disagrees with
Ms Bennett’s recollection of the meeting.
[15] Despite this conflict, the Applicant submits that in the discussions on 9 July 2014, “she
[Ms Bennett] then claimed the reason for my dismissal was that the company had no more
work for me”.
[16] On 14 July 2014, Mr Bhalla was provided with a letter terminating his employment.
[17] The Applicant states that it is “telling that there is no reference to being made
redundant on my termination letter, nor have I been paid any redundancy entitlement”. This is
true.
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[18] However, it is also telling that I have no submission or statement from the applicant to
say what he said when told he was being made redundant on 9 July 2014.
[19] On 9 July 2014, the Employer provided to the Applicant a written letter of termination
of employment which was effective immediately and with two (2) weeks’ pay in lieu of
notice.
CONSIDERATION
[20] For reasons which will become apparent, I intend to initially deal with the conditions
in paragraph 389(1)(b) and s.389(2) of the FW Act first, before I consider whether the
Employer no longer required the job to be performed by anyone because of changes in
operational requirements pursuant to paragraph 389(1)(a) of the FW Act.
s.389(1)(b) - has the employer complied with any obligation in a modern award or
enterprise agreement to consult about the redundancy?
[21] The Employer states in its response to Mr Bhalla’s application that the Water Industry
Award 2010 (Modern Award) applies to his employment.
[22] Neither the Applicant nor the Employer contend that an enterprise agreement applies
to Mr Bhalla.
[23] Clause 12: Redundancy, of the Modern Award refers to an employee’s entitlements
including redundancy pay. There is no reference in Clause 12 to an obligation upon the
Employer to consult with the employee about the redundancy.
[24] In Clause 18: Consultation, of the Modern Award, there is a requirement for
employers to notify and consult with employees where a decision has been made to
“introduce major changes in...structure...that are likely to have significant effects on
employees...” The abolition of one position is not major workplace change.
[25] Accordingly, I find that there was no obligation in a modern award or enterprise
agreement to consult about the redundancy pursuant to paragraph 389(1)(b) of the FW act.
s.389(2) - was it reasonable in all the circumstances for Mr Bhalla to be redeployed
within the Employer’s enterprise or associated entities (if any)?
[26] The Applicant submits:
“The Respondent contends there has been a slowdown in Bypass works causing a
reduction in operation requirements. If such a requirement was genuine, there must
be a consideration of redeployment.
There was no attempt at redeployment of the Applicant within the company or
associated entities” (my emphasis).
[27] The Employer submits:
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“Mr Bhalla was hired to manage significant Bypass Works that Welltech hoped to
tender for and expected to gain in Victoria and Queensland. As per the position
description, 18 items from the total of 28 were project based items and directly related
to project specific deliverables...”
[28] Mr Bhalla disagrees with the above statement of fact in paragraph [27] but only to the
extent that there already is an “East Coast Engineering Manager”. Whether there is an “East
Coast Engineering Manager” or not, I find that Mr Bhalla was employed to manage
significant Bypass Works which the Employer anticipated winning contracts for.
[29] The Employer has set out its schedule of Bypass Works from January 2013 to July
2014. According to the Employer, it has not been successful in obtaining any major Bypass
projects and believes this is due to “companies and governments delaying infrastructure
works and spending”.
[30] In summary, the Employer continues to seek Bypass Works but there are “no
significant works on foot, nor any expected to occur within the next 6 months”. In
conclusion, “there has been a very real lack of Bypass Works for Mr Bhalla, being the reason
for which he was employed”.
[31] The Applicant’s responses to the Employer’s statement of facts are either broad
generalisation or definitional such as whether the Fremantle and Mt Lawley are “major
projects”. In conclusion, Mr Bhalla asserts “Welltech’s tender submission[s] are numerous
and ongoing”.
[32] This background is necessary to understand the application of the condition in s.389(2)
of the FW Act to the actual circumstances of whether Mr Bhalla’s dismissal was a genuine
redundancy.
[33] The Employer submits that:
no projects were allocated to Mr Bhalla since October 2013;
Mr Bhalla was not formally made redundant in October 2013 because Welltech did
not know at that time that Bypass Works would be significantly delayed;
in the absence of professional engineering duties, and in the anticipation of Bypass
works becoming available, Mr Bhalla was assigned administrative duties in
expectation of him being productively employed in duties which were consistent
with his expertise; and
Mr Bhalla became increasingly unfulfilled and frustrated with the administrative
duties due to the lack of engineering work.
[34] The Applicant’s responses appear to infer that the administrative duties were part of
the duties of an Engineering Manager. However, he does not dispute that “I agreed to
undertake the Director’s brother’s house design and construction for which will be using my
Welltech time. The house is yet to be constructed so how is it that I have no work” (my
emphasis).
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[35] In my view, this assignment of “fill in” work such as designing a Director’s brother’s
house is demonstrative of the Employer’s inability to find more work in accordance with the
reason why Mr Bhalla was employed. I am positively satisfied that the Applicant was not
employed to design a house, or this is the appropriate benchmark, as to whether there are
ongoing employment or redeployment opportunities.
[36] The ongoing situation is best described in Ms Bennett’s affidavit which reads:
“Mr Bhalla would request to be provided with new/additional work that related to his
skills but there simply wasn’t any that could be given to him” (my emphasis).
[37] Mr Bhalla agrees that he “requested to be provided with new work” but avoids any
direct response to the simple assertion that there was no work which could be given to him.
Unlike other response to statements of fact by the Employer, Mr Bhalla avoids giving a direct
response to the Employer’s statement that there was no work for him; as I have indicated “fill
in” work is not the determinative of ongoing employment.
[38] The Employer states:
“Mr Bhalla voiced his lack of motivation, diminishing enthusiasm, attention to detail
and boredom towards the administrative projects he was undertaking”.
[39] Mr Bhalla disputes all of the asserted descriptors above in paragraph [38] except to say
that he found the administrative tasks boring.
[40] On 26 June 2014, Mr Bhalla was provided with a Career Development Review Form
(Review Form). Mr Bhalla was required and completed a self assessment of the Review
Form prior to his meeting with the General Manager.
[41] Mr Bhalla’s self assessment of the Review Form relevantly includes the following:
with respect to an understanding of current duties and responsibilities:
“...recently I am carrying out administration function of document control and
filing”;
Can you please describe what you like and if any dislikes working for Welltech?
“I like my job in that I was able to design a house although it is not a core service
Welltech provide...” and “I dislike being assigned document control. I have been
doing this for months and it has been frustrating”;
What part of your job do you feel best suited to?
“I like engineering and do fit best in this area...”
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What elements of your job interest you the most, and the least?
“The most interesting was designing the house...It was exciting and did help me gain
further knowledge in design and construction principles. The least interesting is
document control”.
What do you consider to be your most important aims and tasks in the next year?
“David Campbell’s house as its structure depends on my design”.
What kind of work or job would you like to be doing in one/two/five year’s time?
“One year - continue to build the house”.
[42] In conclusion, Mr Bhalla states that:
“I was the only Engineer in the company. Given Welltech is a company that provides
services requiring quality control by an Engineer and using equipment requiring
hydraulic engineering, it is not reasonable to state there is no ongoing work available”
(my emphasis).
What was reasonable in the circumstances?
[43] Ms Bennett states in her affidavit that the Employer’s revenue from Bypass Works has
dropped 82.5% between 1 January 2014 and 30 June 2014 compared to the period 1 July 2013
to 31 December 2013.
[44] Due to the downturn in major Bypass Works, Mr Bhalla was not made redundant in
October/November 2013 but his focus of work was redirected away from what he was
employed, to undertake administrative duties. These duties were “fill in” duties in the
expectation that Mr Bhalla would be more usefully and productively employed as an
Engineer, when the Employer was successful in obtaining contracts which suited Mr Bhalla’s
skills and expertise.
[45] At a time when the Employer had not been successful in winning Bypass contracts and
Mr Bhalla articulating his dissatisfaction and frustration with administrative duties, the
Employer came to the conclusion that the action which it should have taken in
October/November 2013 to make him redundant, became an imperative in July 2014.
[46] While Mr Bhalla’s involvement in the design of a Director’s brother’s house may have
been satisfying, it did not generate revenue for the Employer and provide a long term solution
to a lack of suitable work for Mr Bhalla.
[47] In Ulan Coal Mines Limited v Honeysett [2010] FWAFB 7578 (Honeysett) the Full
Bench of Fair Work Australia, as it then was, considered, in dismissing an appeal, the
interpretation of “redeployed” in s.389(2) of the FW Act.
[48] Relevantly, the Full Bench concluded in relation to s.389(2) of the FW Act that:
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“[26] First, s.389(2) must be seen in its full context. It only applies when there has
been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if
the dismissal was a genuine redundancy. In other words, if the dismissal is a case of
genuine redundancy the employer has a complete defence to the application. Section
389(2) places a limitation on the employer’s capacity to mount such a defence. The
defence is not available if it would have been reasonable to redeploy the employee.
The exclusion poses a hypothetical question which must be answered by reference
to all of the relevant circumstances.
[27] ...
[28] Thirdly, the question posed by s.389(2), whether redeployment would have been
reasonable, is to be applied at the time of the dismissal...”
[49] The Full Bench also made some obiter remarks concerning s.389(2) which relevantly
are as follows:
“[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..” (my emphasis).
[50] More recently, another appeal to the Full Bench of the Commission, considered the
provisions of s.389(2) of the FW Act in Technical and Further Education Commission T/A
TAFE NSW v Pykett [2014] FWCFB 714 (Pykett).
[51] In Pykett, the Full Bench states:
“[22] Section 389(2)(a) provides an exception to the circumstances in which a person’s
dismissal was a case of ‘genuine redundancy’ (within the meaning of s.389(1)). So
much is clear from the introductory words of s.389(2): ‘A person’s dismissal was not a
case of genuine redundancy if ...’ [emphasis added].
[23] If s.389(2)(a) is enlivened a person’s dismissal will not be a case of genuine
redundancy even if the person’s employer no longer requires the person’s job to be
performed by anyone because of changes in the operation requirements of the
employers enterprise and any relevant consultation obligations have been met. The
subsection then goes on to set out the circumstances which enliven the exception,
namely :
“...if it would have been reasonable in all the circumstances for the person to be
redeployed within...the employer’s enterprise.” (emphasis added)
[24] The use of the past tense in this expression directs attention to the circumstances
which pertained at the time the person was dismissed.
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[25] The word ‘redeployed’ should be given its ordinary and natural meaning. The
ordinary meaning of the word ‘redeploy’ includes:
“Move (troops, workers, material etc) from one area of activity to another,
reorganise for greater effectiveness; transfer to another job, task or function.”
[emphasis added].
[26] The Explanatory Memorandum to what is now s.389(2) is in the following terms:
“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.”
[34] Honeysett is authority for the proposition that for the purpose of s.389(2)(b) it is
sufficient if the Commission identifies a suitable job or position to which the
dismissed employee could be redeployed. The Commission must then determine
whether such a redeployment was reasonable in all the circumstances. We note
that given the factual context the Full Bench in Honeysett did not need to consider
whether s.389(2) may be satisfied if the dismissed employee could be redeployed to
perform other work within the employer’s enterprise (or that of an associated entity.)
Given its particular factual circumstances Honeysett is not authority for the
proposition that it is always necessary to identify a particular job or position to which
the dismissed employee could have been redeployed.
[35] As we have mentioned, the use of the past tense in the expression ‘would have
been reasonable in all the circumstances for the person to be redeployed ...’ in section
389 (2)(a) directs attention to the circumstances which pertained when the person was
dismissed. As noted in Honeysett, [T]’he exclusion poses a hypothetical question
which must be answered by reference to all of the relevant circumstances’...
[36] We have earlier set out the submissions of the appellant and the respondent as to
the proper construction of s.389(2) (see paragraphs [15] to [18] above). We accept the
respondent’s submissions. For the purposes of s.389(2) the Commission must find, on
the balance of probabilities, that there was a job or a position or other work within the
employer’s enterprise (or that of an associated entity) to which it would have been
reasonable in all the circumstances to redeploy the dismissed employee. There must
also be an appropriate evidentiary basis for such a finding. Such an interpretation is
consistent with the ordinary and natural meaning of the words in the subsection; the
Explanatory Memorandum and Full Bench authority. We acknowledge that the facts
relevant to such a finding will usually be peculiarly within the knowledge of the
employer respondent, not the dismissed employee. If an employer wishes to rely on
the ‘genuine redundancy’ exclusion then it would ordinarily be expected to adduce
evidence as to the following matters:
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(i) that the employer no longer required the dismissed employee’s job to be
performed by anyone because of changes in the operational requirements of the
employer’s enterprise;
(ii) whether there was any obligation in an applicable modern award or
enterprise agreement to consult about the redundancy and whether the
employer complied with that obligation; and
(iii) whether there was a job or a position or other work within the employer’s
enterprise (or that of an associated entity) to which it would have been
reasonable in all the circumstances to redeploy the dismissed employer.
[37] The evidence in relation to (iii) would usually include canvassing the steps taken
by the employer to identify other work which could be performed by the dismissed
employee.”
[52] Having considered both Honeysett and Pykett, the emphasis regarding redeployment is
to determine what is reasonable in all the relevant circumstances at the time of the dismissal.
[53] The Employer submitted that Mr Bhalla’s position became redundant in
October/November 2013 and it was at this time, he was redeployed into “fill in”
administrative duties which had a different focus, tasks and functions than that for which he
was employed to undertake. As a consequence, the Employer submits that it has complied
with s.389(2) of the FW Act for Mr Bhalla’s position to be a genuine redundancy.
[54] I am unable to agree with that submission because, as Honeysett and Pykett make
clear, redeployment must be considered at the time of dismissal. Paragraph [24] of Pykett
expresses the position succinctly.
[55] However, Honeysett and Pykett, in my view, are not authority for the proposition that
all actions by the parties leading up to a dismissal by reason of redundancy, are excluded from
consideration. Dismissal by reason of redundancy is not only a “point in time” exercise. Just
as it is necessary to consider events leading up to making a finding of fact that an employer no
longer wanted a person’s job to be performed by anyone, it is a requirement to take into
account all the circumstances leading up to making a finding of whether it would have been
reasonable for Mr Bhalla to have been redeployed, at the time of his dismissal.
[56] The condition, “in all the circumstances” in s.389(2) of the FW Act is only limited
by relevancy, as set out by the Full Bench in Honeysett at paragraph [28].
[57] The foundations of the Applicant’s argument are premised on work activities he was
undertaking at the time of his dismissal. While this approach is understandable, it ignores the
duties which Mr Bhalla was employed to undertake. In my view, it is necessary to look at
both circumstances. Clearly, the activities carried out by Mr Bhalla at the time of his
dismissal were attributable to the diminishing requirement for him to carry out the duties for
which he was employed. The actual duties undertaken at the time of the dismissal, followed
from the change in the Employer’s business circumstances.
[58] For the purposes of this application, I am satisfied that the actions of the Employer in
trying to keep Mr Bhalla occupied with “fill in” duties from October/November 2013
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onwards are relevant to my finding of whether it would have been reasonable, in all the
circumstances, to redeploy him within the Employer’s enterprise or entities (if any).
[59] I am satisfied, on the evidence, that the “fill in” duties, the longer they continued, were
a source of dissatisfaction to the Applicant with the exception of designing a house. For this
reason, the “fill in” duties became increasingly unsuitable as a source of redeployment.
[60] For the above reasons, I find that when the duties for which Mr Bhalla was employed
“dried up” and the Employer identified other work which could be performed by the
Applicant. This “fill in” work extended to work which was outside the Employer’s normal
operations and did not provide revenue. The “fill in” work became increasingly unsuitable to
both parties for different reasons and had to end. In view of these circumstances, I am
satisfied that, at the time of Mr Bhalla’s dismissal, it would not have been reasonable, in all
the circumstances, for him to be redeployed pursuant to s.389(2) of the FW Act.
s.389(1)(a) - the employer no longer requires the job to be performed by anyone because
of changes in operational requirements of the employer’s enterprise
[61] Having explained in detail the circumstances leading to Mr Bhalla’s dismissal in
paragraphs [26] to [60], it is unnecessary to repeat them for the purposes of determining
whether the Employer no longer wanted the role and duties of Western Australian
Engineering Manager being carried out by a discrete employee. For the reasons set out in
paragraphs [26] to [60], I find that the Employer no longer required the job to be performed
by anyone because of changes in its operational requirements.
CONCLUSION
[62] For the above reasons, I am satisfied that Mr Bhalla’s dismissal was a genuine
redundancy and consequently, he is not protected by Part 3-2 Unfair dismissal provisions of
the FW Act. Accordingly, the application must be dismissed. An order to this effect is issued
jointly with this Decision.
COMMISSIONER
Final written submissions:
Applicant: 8 October 2014.
Respondent: 24 September and 15 October 2014.
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