[2019] FWC 1772
The attached document replaces the document previously issued with the above code on 19 March 2019.
The document previously issued contained an error in paragraph 4.
In paragraph 4, reference was made to a prior appeal Decision in the matter: ‘Appeal of consolidate and transfer decision – applicants [2018] FWC 4922’. This reference contained the incorrect Media Neutral Citation (MNC) ‘[2018] FWC 4922.’
The correct MNC for the prior appeal Decision referred to is [2018] FWCFB 5560.
The error has been corrected to read as follows:
‘Appeal of consolidate and transfer decision – applicants [2018] FWCFB 5560’
Associate to Deputy President Bull
Dated 19 March 2019
| [2019] FWC 1772 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Jason Deeney
Mr Richard Park
Mr Chris Hughes
Mr Denis Seiffert
v
Patrick Projects Pty Ltd
(U2014/982, U2014/983, U2014/1008, U2014/1059)
DEPUTY PRESIDENT BULL |
SYDNEY, 19 MARCH 2019 |
Application for unfair dismissal. Whether dismissals were ‘genuine redundancies’ having regard to enterprise agreement consultation requirements and redeployment considerations.
[1] Mr Jason Deeney, Mr Richard Park, Mr Christopher Hughes and Mr Denis Seiffert (the applicants) have made unfair dismissal applications based on their terminations of employment, which were effected by their then employer Patrick Projects Pty Ltd (the respondent) on the ground of redundancy. The applicants contend that their terminations as full time permanent employees were not genuine redundancies and as such they were unfairly dismissed.
[2] Mr Christopher Strauss appeared on behalf of the applicants. 1 The respondent was granted permission to be legally represented2.
[3] The unfair dismissal applications were assigned to me in July 2017, as a result of the resignation from the Fair Work Commission (the Commission) of Drake SDP in April 2017, who had previously been dealing with the applications. The four applications now dealt with had originally been part of a group of six applications made against the respondent; however, two of the six applications U2014/5970 and U2014/7097 have been concluded. 3
[4] Since the filing of the unfair dismissal applications, the applications have been subject to a number of interlocutory applications by the parties listed below (excluding those separately made in respect of U2014/5970 and U2014/7097, and a s.739 application):
• Security for payment of costs – respondent [2014] FWC 6700
• Appeals against directions – applicants [2015] FWCFB 6323
• Application for legal representation – respondent [2016] FWC 4189
• Appeal of legal representation decision – applicants [2016] FWCFB 5069
• Application for legal representation be revoked - applicants [2017] FWC 5429
• Recusal application – applicants [2017] FWC 5613
• Stay application re legal representation decision – applicants [2017] FWC 6106
• Appeal of legal representation decision – applicants [2017] FWCFB 6515
• Appeal of recusal decision – applicants [2018] FWCFB 86
• Application to consolidate and transfer – applicants [2018] FWC 3406
• Application for adjournment, legal representation revocation and witness attendance – applicants [2018] FWC 3514
• Appeal of consolidate and transfer decision – applicants [2018] FWCFB 5560
• Appeal of decision re: adjournment, legal representation revocation and witness attendance - applicants [2018] FWCFB 5010
• Application to dismiss applications for failure to comply with directions, application for recusal, application to revoke legal representation – respondent and applicants [2018] FWC 5636
• Application for witness attendance and production of further documents – applicants [2018] FWC 7679
[5] The employment of the applicants was governed by the Patrick Projects Pty Ltd AMC Cargo Handling Agreement 2012-2015 (the Agreement), registered under the Fair Work Act 2009 (the Act), a Memorandum of Understanding Deed (the Deed) between the respondent and the Maritime Union of Australia (MUA), and the Stevedoring Industry Award 2010. 4 The terms and conditions of employment were advised to the applicants in their Letter of Offer of Employment on commencement of employment.
[6] The applicants were initially employed as casual employees in July 2012 5 and their employment was located at the Australia Marine Complex (AMC) in Henderson 23 kilometres South of Perth in Western Australia. A cargo handling service at the AMC was established by the respondent to provide stevedoring services to vessels steaming to and from Barrow Island (the Project) where the construction of the Chevron Gorgon LNG6 plant was taking place. The applicants were all appointed to full time permanent positions in August 2012.7
[7] On 19 February 2014, the respondent wrote to 43 employees including each of the applicants notifying them of their redundancy and advising that their employment would come to an end on 20 March 2014 and offering each applicant employment as a casual. The offer of casual employment while taken up by other redundant employees was not taken up by any of the applicants.
[8] The respondent also provided the applicants with a list of available positions at Asciano, an associated entity of the respondent. None of the applicants expressed interest in the available positions.
[9] The case for each of the applicants is essentially the same. Their Form F2 applications state that the dismissals were unfair as the respondent failed to discuss with the applicants any possible positions into which they could be deployed, the reasons put why the dismissals were unfair were substantially expanded upon during the hearing before the Commission.
[10] At the conclusion of the hearing, the parties provided the Commission with written closing submissions summarising their respective positions. 8 The parties were also provided with the opportunity should they wish to provide a further written reply to each other’s closing submissions by 25 January 2019.9
[11] The applicants also forwarded written submissions on 18 January 2019, titled Submissions on Form 52 Orders to Produce Documents and subsequent Complaint. The submissions dispute the respondent’s position that a booklet referred to by the parties as the ‘Little Red Book’, 10 and published for the purposes of respondent’s AMC Henderson Project work, was provided to the applicants.11
Supplementary submissions
[12] On 4 March 2019, the applicants’ representative forwarded written ‘Supplementary Submissions” in relation to Chapter 3 Part 3.1 General Protections of the Act which stated were inadvertently neglected to be included in previous submissions and asked that they be taken into account. On 6 March 2019, Mr Strauss sent an updated version of the supplementary submissions. The submissions allege that the respondent took ‘adverse action’ against the applicants when it dismissed the applicants. 12
[13] The admission of the supplementary submissions is opposed by the respondent.
[14] The applicants tendered their written closing submissions on 20 December 2018. At the Commission’s initiative the applicants were provided with the opportunity to file a written response to the respondent’s written submissions by 25 January 2019. The applicants filed their response submissions on 25 January 2019. The applicants now seek to file further supplementary submissions some 10 weeks after the final hearing day on the ground that they inadvertently neglected to include submissions in relation to ss. 340 through to 345 and 361 of the Act in their previous written submissions. The ground of inadvertence is far from a compelling reason to admit the submissions particularly considering the time frame that the applications have been before the Commission. The admission of the supplementary submissions would be prejudicial to the respondent.
[15] If the applicants are of the view that their dismissals were a breach of the General Protections provisions of the Act which the supplementary submissions so allege, they should (noting the prohibition on multiple applications at s.725 of the Act) have made or make such applications under the provisions set out in the Act. While the Commission may form and act upon its own opinion about legal rights and obligations as a step in the exercise of its functions and powers, 13 the Commission is not vested with the jurisdiction to make findings of adverse action which are judicial not arbitral proceedings.
[16] Further, parts of the supplementary submission seek remedies unrelated to the unfair dismissal applications now being considered. 14
[17] On the basis of the above comments the applicants’ supplementary submissions will not be considered in this decision.
Evidence of applicants
[18] The applicants tendered witness statements which were prepared by their representative; however, in essence, the witness statements replicated each other. Most of the oral evidence given by each of the applicants was in addition to what was contained in their witness statements. All applicants stated that they had not received a copy of a booklet referred to by the parties as the ‘Little Red Book’. 15
[19] The Little Red Book comprised of copies of the Agreement, the Award, the Deed and a document titled 2012 Employee Handbook Policies, Entitlements and Obligations.
[20] Mr Deeney’s evidence was that he obtained a copy of the Little Red Book in the last 4 weeks of his employment when he needed to ‘make a dispute’. 16 Mr Deeney gave evidence about making enquiries with the respondent about receiving additional training and in particular high risk licence training. On 13 March 2014, he sent an email17 to Ms Penny Thompson the respondent’s Training Co-ordinator stating inter alia:
“I am being made redundant very soon and would like to know what the training department has in mind to make sure I have ALL my High Risk Licences according to the EA, before I leave.”
[21] On 20 March 2014, Mr Deeney’s last day of employment, he sent an email to Ms Marion Storey the respondent’s HR Manager advising that he was in dispute with the respondent over the lack of training provided by the respondent. 18
[22] Mr Deeney stated that he did not notice any downturn in the respondent’s work and was not trained in or aware of the dispute procedure under the Agreement. 19 He attended the 22 January 2014 briefing from the respondent on the impending redundancies20 and a further briefing on 19 February 2014.21 At the 19 February 2014 briefing Mr Deeney was advised in correspondence handed to him that he was to be made redundant.22 Mr Deeney confirmed that he did not put in an expression of interest for any of the career opportunities within Asciano.23
[23] Mr Hughes stated that the respondent’s Business Manager Mr Burton advised during his induction that the respondent would train employees on all the high risk licences for all the plant and machinery on the Project. 24 Mr Hughes stated that he was not provided with training on all the plant and equipment on site.25 He stated that he was not provided with a copy of the Little Red Book or trained in how to raise disputes.26
[24] Mr Hughes attended the 22 January 2014 and 19 February 2014 redundancy briefing; 27 he did not express an interest in the Asciano career opportunities.28
[25] Mr Park’s evidence was that although he raised disputes, 29 he was unaware of how to correctly raise disputes at the workplace as he was not provided with a copy of the Little Red Book.30 He had requested further training and was told in January 2014 that no more training was being undertaken.31
[26] Mr Park stated that he could not recall attending the 22 January 2014 briefing although he acknowledged his signature was on the attendance list. 32 He did recall attending the 19 February 2014 employer briefing. Mr Park stated that he believed that he could have been deployed to some of the career opportunities listed with Asciano.
[27] Mr Park stated that he spoke to Mr Burton about a possible position in Fremantle. 33 Mr Park was aware of previous redundancies on site in 201334 although he thought the work would continue on.35 He understood that future redundancies would occur on a first on, last off basis.36 He did not accept the offer of casual employment due to concerns he had about conditions attached to the offer.37
[28] Mr Seiffert also gave evidence that he had not been provided with a copy of the Agreement and was unfamiliar with the dispute resolution procedure; 38 he did not receive a copy of the Little Red Book.39 Mr Seiffert stated he did not attend the 22 January 2014 briefing as he was on annual leave,40 but attended the 19 February 2014 briefing.41
[29] Mr Seiffert stated that there were some career opportunities at Asciano that he was qualified to fulfil but there were no redeployment discussions with the respondent. 42 In cross examination Mr Seiffert stated that he knew the redundancies were to occur and that there was little he could do about it.43
[30] Mr Seiffert acknowledged he had requested from the respondent on 31 October 2013 a calculation on a voluntary redundancy pay-out. 44 He had observed that a number of employees had already been made redundant prior to his redundancy.45 Mr Seiffert did not lodge an expression of interest for any of the roles in the list of current opportunities with Asciano.46
[31] Mr Seiffert expressed the view that he was unable to be made redundant until the training under the Deed had been provided by the respondent. 47 Mr Seiffert did not accept the offer of casual employment from the respondent as he wasn’t happy with the terms attached to the offer.48
[32] Evidence was also given by Mr King, a former employee of the respondent, on the AMC Henderson work site. Mr King initially filed a brief statement dated 2 October 2017. The applicants’ representative was instructed by the Commission to file a more comprehensive statement if Mr King’s evidence was to address matters not contained in his statement. 49 This instruction was based on the experience of all the applicants giving evidence well outside that contained in their witness statements. Subsequently, a more comprehensive witness statement was filed, dated 18 August 2018.50 Much of Mr King’s statement was not relevant to the applications before the Commission and tended to be in the form of submissions as opposed to evidence, and where it was relevant it did not add to what had already been said by the applicants.
Submissions
[33] It was put that none of the requirements under s.389 of the Act were met to establish a case of genuine redundancy. Further, the applicants stated that they were unfairly dismissed as they were not issued with all of the instruments that governed their employment and therefore were restricted from fully and properly understanding and exercising all of their employment rights 51.
[34] The applicants submit that they were not provided on engagement or any time during their employment with a copy of the Little Red Book.
[35] Although the applicants did raise disputes 52 the dismissals are said to be unjust as the applicants were unable to “fully, properly, efficiently and effectively”53 raise disputes in regard to training, Project ramp down and the redundancy process.
[36] The applicants also contend that the reason for their redundancies was not genuine in that there was no Project ramp down when the redundancy process commenced or when the redundancies were affected. 54 It was submitted that a Project ramp down is not supported by the respondent’s graph of TEU (Twenty Foot Equivalent Unit) per month as it did not demonstrate any reduction of work. Further, the Project ramp down clause at 12.13 of the Deed is said by the applicants to provide for redundancy as the Project comes to an end. The applicants were made redundant on 20 March 2014; however, the respondent was not notified until 17 November 2015 that the Project was to come to an end.55
[37] It is put that the applicants’ jobs were still required to be performed by someone because there was no changes in operational requirements. The respondent did not provide any documentary evidence of any Project ramp down or any required change to the manning levels.
[38] It was contended that the offer of casual employment meant that their roles were still required to be performed. 56
[39] The applicants submit that the respondent conducted briefings for employees on 22 January 2014 and 19 February 2014 but did not inform them they were to be made redundant until they received correspondence from the respondent on 19 February 2014, advising that they were redundant.
[40] It is submitted that it would have been reasonable for the respondent to have redeployed the applicants within the respondent’s enterprise. The applicants state that they had not completed the training that was required under the Deed and that it would have been reasonable for the respondent to redeploy them to complete their training. 57 The training was a paid work activity in the workplace.58
[41] The applicants state that the respondent did not follow the Agreement’s dispute procedure in relation to redundancy disputes. 59
[42] The applicants question the veracity of the evidence given by Mr Burton on behalf of the respondent and his evidence that the Project was in a ramp down phase necessitating their redundancies. 60
[43] The respondent states that in January 2014, it was notified by its client that its Schedule of Works would be reduced based on operational requirements of the Chevron Gorgon LNG construction project which would require a reduction in workforce numbers and labour requirements at the AMC.
Evidence of Mr Damian Burton
[44] At the time of giving his evidence Mr Burton was no longer employed by the respondent having left their employment in July 2014. During the period March 2012 to July 2014 Mr Burton was the Business Manager for the respondent. The respondent provided stevedoring and related services to Agility Logistics which were provided for the Kellogg Joint Venture Gorgon, 61 which was the Downstream Engineering Procurement and Construction Manager for the Barrow Island LNG plant off the North West Coast of Western Australia on behalf of the operator Chevron (Australia) Pty Ltd. Mr Burton was responsible for the day to day operation of the work including managing and directing the workforce.
[45] The respondent’s services commenced on 29 April 2012 and involved stevedoring cargo transported to and from Barrow Island which would cease before or at the end of the construction of the LNG plant. The services were provided from the Australian Marine Complex in Henderson.
[46] Mr Burton stated he knew the applicants personally from their employment with the respondent.
[47] From January 2014, the respondent was notified by its principle that the operational requirements for the Gorgon Project would require the respondent’s Schedule of Works to be reduced. This notification required a reduction in the workforce of 85 employees from 221 permanent employees to 136 permanent employees.
[48] Mr Burton’s evidence was that the respondent undertook a consultation process involving all employees including the applicants and the MUA. In particular, Messer’s’ Deeney, Park and Hughes attended a site briefing on 22 January 2014, with their attendance confirmed by their signatures on the attendance register. 62 While there was no record of Mr Seiffert having attended this briefing, Mr Burton stated that Mr Seiffert had received the relevant information as those employees that did not attend were later given the documentation or it was sent to their residential address.
[49] During the briefing a PowerPoint presentation setting out the reasons for the 85 redundancies was provided together with a proposed time table and process. The PowerPoint presentation advised that in July 2013 the respondent’s peak labour requirement had been reached and that cargo volumes required a reduction in manning.
[50] The process to be followed was set out as follows:
• 22 to 30 January 2014 discussions held with employees.
• 31 January to 13 February 2014 a voluntary redundancy consideration period would operate.
• 14 February 2014 those selected for voluntary redundancy would be advised.
• 17 February 2014 voluntary redundancies would take effect.
• 19 February 2014 employee to be made redundant involuntarily to be advised.
• 20 March 2014 involuntary redundancies effective, termination date for A and B supplementary employees.
• 27 March 2014 involuntary redundancies effective for employees with 2 or more years’ service and 45 years of age or older. 63
[51] All employees were provided with a letter signed by Mr Burton on 22 January 2014 advising of the redundancies and the process. A list of current vacancies with the Asciano Group throughout Australia together with a Frequently Asked Questions document was also provided to affected employees. 64 Mr Burton’s evidence was that further discussions were held with any employee that wished to have a discussion about their future employment.65
[52] Successful voluntary redundancy employees were notified on 14 February 2014, however the expression of interest for voluntary redundancies process did not generate sufficient volunteers and 43 employees were required to be made redundant on an involuntary basis. The employees made involuntarily redundant were determined on the ‘last on, first off’ principle. Each of the applicants was made redundant on this basis.
[53] Although Asciano were not actively recruiting, all employees were given a list of opportunities in the Asciano Group and were advised to continue to look at the Asciano website. 66 None of the applicants expressed an interest in any listed position with Asciano.
[54] On 19 February 2014, an employee briefing was held with the workforce and the applicants were issued with letters signed by Mr Burton which advised that they were to be made redundant in 4 weeks being 20 March 2014. 67 At the same time, each of the applicants was offered employment on a casual basis with the respondent subject to certain terms and conditions to commence on 21 March 2014 being the first day after their effective redundancy date. The applicants subsequently indicated difficulties with the terms attached to the offer of casual employment and declined the offer of casual employment.
[55] Mr Burton’s evidence was that since the applicants’ redundancies the respondent had undergone further restructures resulting in additional workforce reductions and that its AMC operations closed on 31 December 2015. 68
[56] Under cross examination Mr Burton stated that to the best of his knowledge the applicants were provided with a copy of the Little Red Book. 69 Mr Burton stated that a total of 630 copies of the Little Red Book were printed in 3 batches70. In addition copies were available on request at the respondent’s reception/site office.71
[57] Mr Burton stated that in April 2012, when the respondent took over the operation, productivity was 1.2 TU (Transport Unit) per hour and within 6 to 9 months it was 20.2 TU per hour. 72 Due to efficiencies on the Project being achieved, fewer employees were needed. The nature of the respondent’s Schedule of Works always envisaged that employees would be made redundant.73 Mr Burton did not accept that the TEU per month graph showed that the work was not slowing down as one item of equipment can distort such a conclusion. 74 Mr Burton’s evidence was that the TEU graph was irrelevant to the decisions taken in relation to redundancies.75
[58] Mr Burton’s evidence was that it was not in the respondent’s interests to have a reduced workforce as the Project model was a cost plus activity, as every day an employee was rostered to work or in training the respondent received a margin above the cost of engaging the employee. The respondent’s workforce reductions occurred on the instruction of their client 76 and they were specific about the numbers to be made redundant.77
Submissions of respondent
[59] The respondent confirmed that the Australian Marine Complex is a marine loading facility primarily set up for logistical support for the construction of the LNG plant on Barrow Island. Each of the applicants was employed in the role of Operator 1 to perform stevedoring work and their terms and conditions were covered by the Agreement and their contracts of employment. Prior to taking over these functions the work was being undertaken by a company known as Offshore Marine Services.
[60] On 22 July 2013, following a dispute between the MUA and the respondent over involuntary redundancies at the AMC site, Cloghan C issued by consent an Order 78 which included the process to be followed for future redundancies including that employees would have the option of being re-engaged as casuals. The Order also noted at [5]:
“The entire Project workforce employed pursuant to the 2012 AMC Agreement (Patrick Workforce) has been made aware that there may be future redundancies.”
[61] In a decision of Cloghan C of 14 August 2013 79 concerning the same parties, the same observation regarding future redundancies was made.
[62] In January 2014 the respondent was notified by its principle that its Schedule of Works was to be reduced, and as a result the applicants were subsequently made redundant.
[63] It is submitted that on the basis that the applicants’ dismissals were genuine redundancies they are not persons protected from unfair dismissal as per the Act. The required Agreement consultation with the applicants regarding their redundancies was effected by the respondent from 22 January 2014 onwards.
[64] On 22 January 2014, Messrs Deeney, Hughes and Park attended a site meeting and were provided with written information concerning their redundancies. Mr Seiffert was provided with the written information. Further discussions occurred between 22 January 2014 and 30 January 2014. Between 31 January 2014 and 13 February 2014 the respondent called for expressions of interest for voluntary redundancies.
[65] In respect of possible redeployment opportunities the respondent states that it considered all of the vacant positions across Australia and across the group of associated entities.
[66] Given the high number of redundant employees with similar skills and work experience all employees including the applicants were provided with a list of opportunities available at the time, should any employee believe they had the requisite skills, qualifications and experience, it was expected that they would express their interest to the respondent. The applicants did not express an interest in the notified opportunities; had they done so however there would be no certainty that redeployment would have eventuated due to the number of redundant employees. 80
Relevant statutory provisions
[67] Section 394(1) of the Act provides that a person who has been dismissed may apply to the Fair Work Commission (the Commission) for an Order under Division 4 granting a remedy for unfair dismissal.
[68] Section 385 of the Act provides as follows:
“s.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.”
(My underline)
[69] Section 396 of the Act requires that before considering the merits of an application for an unfair dismissal remedy, the Commission must decide a number of threshold issues:
“s.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.”
(My underline)
[70] As discussed above, the respondent submits that the applicants’ dismissals were the result of genuine redundancies.
[71] Section 389 of the Act sets out the meaning of genuine redundancy, as per s.389(1) and (2) below:
“389(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.
(My underline)
389(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”
Were the applicants’ positions no longer required s.389(1)(a)
[72] The applicants dispute that their positions were no longer required to be performed by anyone because of changes in the operational requirements of the respondent’s enterprise.
[73] While the applicants submit (which the respondent disputes) that there was no evidence of a reduction in work, this in my view is beside the point if the operational requirement flows from an instruction from the respondent’s principle to reduce its workforce. The reason for the instruction is somewhat immaterial, unless the whole exercise can be shown to be a sham. For example a client may wish to do the same work in-house or award the work to another operator.
[74] In any event, I accept that the applicants’ positions as permanent full time Stevedore Operators - Grade 1 were not required to be performed subsequent to 20 March 2014 when the allocation of permanent positions was reduced from 221 to 136 following advice from the respondent’s principle that its Schedule of Works was to be reduced, being the change in operational requirements of the respondent thus satisfying the requirements of s.389(1)(a) of the Act.
[75] It cannot be seriously argued that the applicants’ positions were not made redundant due to the operational requirements of the respondent following an instruction from the client. The construction of an LNG plant on Barrow Island for the Gorgon Project is self-evidently work which would require an increase to and eventually a decrease in manning levels, the only question is the timing of these fluctuations which is in the control of the respondent’s principle who provides the respondent with instructions regarding their Schedule of Works and the employee numbers it is prepared to fund.
[76] Mr Burton summarised the position in his oral evidence at PN9458 – 9459:
“The primary driver for this activity was driven by our client and what they anticipated was the offload and load schedule, so it was impacted by that directly. It was also impacted by the fact that our clients had chosen to adopt parallel supply chains. They were using another entity, I can't remember its name, it began with an S, who also operated out of the Henderson area, as well as Qube within the Fremantle area, so they had adopted methods of gaining redundancy within their supply chain, but the primary driver was what they anticipated were the work levels. And again, as I intimated - or I stated quite clearly before, in fact in some ways the more efficient we got, the less people were required on site, because we were doing the same amount of work. And I gave you the number before that when we started I think the productivity was approximately 1.2 TEU per hour, and it went to 20.2 TEU per hour, so it became - you know, we became remarkably more efficient thanks to the great contribution of our employees, so just - there wasn't the requirement for the same numbers to do the same amount of work. And it really wasn't until we had been there that year that the client sort of worked that out as well as we did.”
How relevant and determinative would that graph be that Mr Strauss showed you to the question of whether or not redundancies needed to take place?---Absolutely nothing to do with it at all.”
[77] While the respondent did not produce any documentation relating to the client’s instruction to reduce the permanent workforce, I accept Mr Burton’s evidence that this occurred. The applicants were unable to demonstrate that the respondent was not directed to reduce the size of its workforce. 81
[78] I am satisfied that the respondent no longer required the applicants’ jobs to be performed by anyone because of changes in the operational requirements of the respondent’s enterprise following a direction from its client. The fact that casual opportunities still remained does not detract from the need to reduce the full time permanent workforce.
Compliance with obligation in enterprise agreement to consult about the redundancy s.389(1)(b)
[79] The parties accept that the applicants were covered by an enterprise agreement known as the Patrick Projects Pty Ltd AMC Cargo Handling Agreement 2012-2015. Clause 31 - Introduction of Change and clause 15 - Redundancy in the Agreement are the appropriate clauses to consider when ascertaining whether the respondent complied with any obligation in an enterprise agreement to consult about the redundancies.
[80] Where there is a need to reduce the size of the workforce the Agreement’s redundancy clause requires the respondent to consult in accordance with clause 31 - Introduction of Change which states the following;
“31.1. Company duty to notify
31.1.1. Where the Company has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the Company undertakes to notify the employees who may be affected by the proposed changes and the relevant National and Branch Secretary of the MUA.
31. 1. 2. Significant effects includes termination of employment, major changes in the composition, operation or size of the workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or transfer of employees to other work or locations and the restructuring of jobs and the use of sub-contractors or other contractors. Provided that where this Agreement makes provisions for alterations of any of the matters referred to herein, an alteration shall be deemed not to have significant effect.
31. 2. Company duty to discuss change
31.2.1. The Company undertakes to discuss with the employees affected and if the employee so chooses their union, inter alia, the introduction of the changes referred to in clause 31.1.1, the effects the changes are likely to have on employees, measures to avert or mitigate any adverse effects of such changes on employees and give prompt consideration to matters raised by the employees and if the employee so chooses their union in relation to the changes.
31.2.2. The discussion shall commence as early as practicable after a decision has been made by the Company to make the changes referred to in clause 31.1.1. For the purposes of such discussion, the Company undertakes to provide in writing to the employees concerned and if the employee so chooses their union, all appropriate information about the changes including the nature of the changes, the expected effects of the changes on employees and any other matters likely to effect employees.
31.3. Implementation of change
31.3.1. It is agreed between the parties that after the above notification and discussion have taken place that the Company, after careful consideration of the views of employees may implement the change with seven days notice.
31.3.2. Where subject to the provisions of this clause, the Company exercises its rights to implement change in the workplace and the employees disagree with that decision, subject to there being no stoppage of work as a result of the decision of the Company, the employees and if the employee so chooses their union, may refer the matter in dispute to the Fair Work Australia for conciliation and arbitration if necessary.”
[81] In summary, the consultation obligations of the respondent which arise from clause 31 are:
1. Where a definite decision to introduce major changes such as redundancies is to be effected they must notify the employees who may be affected by the proposed changes and the relevant National and Branch Secretary of the MUA.
2. As early as practical after making the decision to implement redundancies hold discussions regarding the effects the changes are likely to have on employees, measures to avert or mitigate any adverse effects and give prompt consideration to matters raised by the employees. To provide in writing all appropriate information about the changes.
3. After notifying employees and holding discussions discussion consider the views of employees.
[82] After having complied with the above the respondent can then implement the redundancies with 7 days’ notice.
[83] In July 2013 the Commission dealt with a dispute concerning the involuntary redundancy of 62 employees at the AMC by the respondent. The evidence of Mr Burton (which was not seriously challenged under cross examination) was that from the start of December 2013 the respondent had been in discussions with their contract principle about a further reduction of permanent employees in the workforce. It was agreed that any reduction should not occur until after Christmas 2013. 82 The process commenced with notifying the MUA on 22 January 2014 and beginning the employee consultation.
[84] Mr Burton forwarded correspondence to employees dated 22 January 2014 which stated inter alia:
1. Patrick has been notified by the Contract Principle of changing work circumstances at the AMC that will require a reduction in workforce numbers and labour requirements at the AMC.
2. Patrick initially expects that in the short term it will need to reduce its permanent workforce by approximately 85 permanent positions.
3. Voluntary redundancy will be considered in the first instance and should the target not be achieved, involuntary redundancies will occur.
4. Patrick will discuss arrangements for possible redeployment opportunities with employees.
5. Employees could contact Mr Burton on his mobile phone if they wished to discuss any of the above.
[85] An employee briefing was also held on 22 January 2014, where information was provided on the process in conjunction with an overhead slide presentation. All applicants other than Mr Seiffert attended this briefing. A list of Asciano’s current opportunities was also made available to employees including the applicants together with a Frequently Asked Questions Patrick Projects Redundancy comprising of 17 questions.
[86] After consolidating the voluntary redundancy numbers against the required numbers, 43 employees were required to be made redundant on an involuntary basis by applying the first on, last off principle. An employee briefing was held on 19 February 2014, attended by all the applicants where employees to be made redundant involuntarily on the application of the first on, last off principle (which included the applicants) were informed in correspondence signed by Mr Burton and handed to them. The correspondence advised that consideration had been given to viable alternatives including possible redeployment of the applicants. The termination date for the redundancies was advised as 20 March 2014.
[87] An offer of casual employment was also given to the applicants on 19 February 2014 by the respondent, which they later declined.
[88] Mr Burton’s evidence was:
“PN9035 There was no one who came to the 19 February briefing thinking my God, where did this come from. It was abundantly clear to everyone. It was the third time we'd done it as a site. We had had a month - you know, it was the period from 22 January to 19 February where there were multiple discussions; individuals came and spoke to me, asking me questions about it; they went to HR; they went to their supervisors; there were many, many discussions that individuals chose to take advantage of.”
(My underline)
[89] The nature of the consultation process with employees regarding the redundancies was put by SDP Drake in Strauss v Patrick Projects Pty Ltd in the following terms 83:
“This was not a one on one process. The whole project was coming to an end. A large number of employee positions were being made redundant. There was a great deal of correspondence from the respondent to its employees regarding the proposed redundancies and PowerPoint presentations occurred at employee briefings. Handouts regarding the process and the possibilities for redeployment were delivered to employees.”
[90] I see no reason to dismiss the evidence of Mr Burton or depart from the conclusions of SDP Drake as stated above. The applicants were notified in person and in writing of the proposed workplace change resulting in their redundancies and discussions occurred at the two employee briefings (accepting that Mr Seiffert did not attend the 22 January 2014 briefing but was provided with all written materials) which took into consideration measures to mitigate or avert any adverse effects including redeployment. This included a call for expressions of interest in voluntary redundancy, providing a list of possible opportunities with an associated company, assistance with CV writing 84 and the offer of casual employment.
[91] When the decision was made to implement redundancies the applicants were notified that they may be affected; this occurred on 21 January 2014 in writing and at an employee briefing. 85
[92] The applicants were provided with written material containing all appropriate information about the changes. Discussions regarding the effects the changes were likely to have on the applicants, and measures to avert or mitigate any adverse effects and give prompt consideration to matters raised by the employees, were undertaken by the respondent. The views of the applicants regarding the respondent’s offer of casual employment were taken into consideration.
[93] I am thus satisfied that the consultation requirements set out in s.389(1)(b) of the Act have been met.
Redeployment s.389(2)
[94] Section 389(2) of the Act states that a dismissal will not be genuine redundancy if it would have been reasonable in all the circumstances for the employee to be redeployed within the respondent’s enterprise or an associated entity. The applicants were offered casual work with the respondent which they declined and were provided with a list of career opportunities with an associated entity Asciano and advised to file an expression of interest. No expressions of interest were received from the applicants.
[95] Mr Burton stated in cross examination:
“PN9137 It was determined that there were no opportunities for large groups of the workforce to go to a particular location, but again on the same day we gave out lists to employees that had options available to them to inquire about, to come and discuss, to apply for if they should choose to do so.”
PN9143 We gave them a list of options that were available and provided them the opportunity to engage with HR, to make phone calls to the site, to click onto the web site to have a look at it so that they could find out more. We certainly weren't about forcing any individual to apply or not apply to a role. We gave them a list on 22 January, we gave them an another list - an updated list - on 19 February and we certainly provided them the opportunity to engage further. We weren't in - you know, again remembering the numbers, so there's a capacity issue, but we also weren't in the habit of forcing individuals, you know, to make a decision. We provided them the opportunity to engage and to seek advice from us as well as from the potential host site.”
[96] Assuming it was possible for the applicants to have been redeployed into a position of interest, if the applicants do not make it known that they have an interest in a possible redeployment opportunity having been requested to do so by the respondent, it cannot be said at a later date to have been reasonable that they be deployed to these positions. 86
[97] I note the comments of the Full Bench in Marshall v UBS AG Australia Branch T/A UBS [2012] FWAFB 6852 at [15]:
“… the appellant was given a list of vacant positions on 12 September 2011 and at no time did he indicate any interest in any of those positions. We do not accept the appellant’s assertion that he was not given an opportunity to discuss the job roles on offer. He had the list of vacant roles for several days and he did not communicate to UBS any interest in any of those roles notwithstanding that he was communicating with UBS orally, and in writing, on a regular basis during that period of time about other matters.”
[98] The applicants contend that they have a workplace right to be trained in all high risk licences 87 and that it would have been reasonable for the respondent to have redeployed them at the AMC to complete training that was required under the Deed. It was put that their redundancies were unable to occur until the training obligations of the respondent had been completed. This proposition is rejected as lacking in substance. Putting aside whether the Deed placed an obligation on the respondent to provide further training to the applicants while employed, any training obligation does not usurp the respondent’s right to terminate the employment relationship on redundancy grounds.
[99] In this respect I concur with the views of Gilmour and Barker JJ and SDP Drake extracted below.
[100] In King v Patrick Projects Pty Ltd 88 which involved the applicants in this matter Gilmour J made the following comments:
“[30] However the applicants have no standing as they are no longer employed by Patrick Projects, their employment having terminated in March 2014 and, in the case of King, on 30 April 2014. Accordingly Patrick Projects no longer has any ongoing obligations to the applicants in relation to training or any other employment related entitlement.”
“[33] It is plain enough that the Deed, having regard to these terms, did not have an independent operation that survived the cessation of the Agreement and the termination of the employment of the applicants at the AMC. It was to govern the performance of cargo handling functions during the currency of the Agreement and the employment of relevant employees. Once the employment of the applicants with Patrick Projects ceased, the Deed had no continuing operation in respect of their “employment”. Further, the Deed has now ended. Plainly, there is no other continuing obligation under the Deed and to any of the applicants.
[101] In a further decision of the Federal Court involving the applicants Barker J 89 stated:
[34] In the circumstances, the primary judge’s finding to the effect that the applicants had no “standing” and that Patrick Projects no longer had any ongoing obligations to them in relation to training, or any other employment related entitlement, must be considered correct.”
[102] In Christopher Strauss v Patrick Projects Pty Ltd 90 SDP Drake concluded:
[63] … In the Agreement training was contemplated to be undertaken in the course of employment. The respondent is not obliged to continue to employ persons and train them when there is no work to be performed.”
[103] Based on the submissions and evidence before the Commission I am satisfied that it was not reasonable in all the circumstances for the applicants to be redeployed within the respondent’s enterprise or an associated entity.
[104] In view of the above conclusions I am satisfied that the applicants’ redundancies were genuine redundancies as per s.389 of the Act which is a complete defence to the applications. On this basis the applications cannot succeed and must be dismissed.
[105] The applicants raised a number of matters that in my view were not germane in determining whether the dismissals were genuine redundancies as per s.389 of the Act. However, as much time was devoted by the applicants to these issues I will provide my conclusions.
Provision of the Little Red Book
[106] The applicants’ submissions and their evidence was that they were not provided on their engagement with a copy of the Little Red Book. Copies of invoices said to be for the publication of the Little Red Book were provided by the respondent to the applicants’ representative. The applicants’ submissions are that the invoices provided do not demonstrate that the Little Red Book was published in the numbers submitted by the respondent. During the hearing the applicants’ representative submitted that the invoices were ‘fake’. 91 Mr Burton was not cross examined regarding the invoices.
[107] Whether the applicants were in possession of the documents contained in the Little Red Book or the Little Red Book itself does not impinge on the questions that need to be determined by the Commission under s.389 of the Act. Even accepting that on commencement of their employment the applicants were not provided with a copy of the Little Red Book or in possession of its contents my conclusions regarding whether their dismissals were genuine redundancies as per s.389 of the Act remain.
[108] Knowledge or possession of the Little Red Book by the applicants is immaterial to whether the respondent no longer required the applicants’ jobs to be performed by anyone because of changes in its operational requirements or whether the respondent complied with any obligation in the Agreement to consult about the redundancies or whether it was reasonable for the applicants to be redeployed.
Memorandum of Understanding
[109] In my view there is no merit in the applicants’ submission that the Deed between the respondent and the MUA only allowed for redundancies to occur when the Project came to an end which was said to be on 15 December 2015. 92
[110] Clause 12.13 of the Deed - Project ramp down when read in its entirety refers to progressive employee terminations on the basis of last on, first off, following peak manning as numbers in particular roles are no longer needed. This is what occurred where tranches of employees were made redundant at various times following the attainment of peak manning on the Project in July 2013. This process is standard practice for work established for construction projects.
The Dispute procedure
[111] I am unable to relate the applicants’ allegation that the respondent did not follow the dispute procedure of the Agreement to the meaning of a ‘genuine redundancy’ under s.389 of the Act. The raising of a dispute regarding the redundancy process albeit without full knowledge of the process cannot be held to be a bar on the redundancies proceeding. I agree with the views expressed by Drake SDP in Strauss v Patrick Projects Pty Ltd 93
“[49] I am satisfied that the status quo clause in the Agreement does not have the effect argued for by Mr Strauss. Mr Strauss’ submissions in this regard are misguided. …
There is nothing in this clause that dictates that the respondent has to maintain in all circumstances the employment of an employee who is involved at some stage or other in an unresolved grievance or dispute. This is particularly clear in circumstances where a genuine operational reason arises for the retrenchment of employees ….”
[112] The effect of arriving at the conclusion that the applicants’ dismissals were the result of genuine redundancies as per s.396(d) of the Act is that the Commission need not determine whether the dismissal was harsh, unjust or unreasonable.94 However, should I be wrong in finding that the redundancies were genuine redundancies for the purposes of s.389 of the Act I will deal with the claims under s.387 of the Act which outlines the criteria the Commission is to have regard to in determining whether the dismissals were harsh, unjust or unreasonable; those being:
(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.
(a) Whether there was a valid reason related to capacity or conduct for the dismissal
[113] In this matter I am satisfied the respondent no longer required the applicants’ jobs to be performed by anyone because of changes in the operational requirements of the enterprise. This view is consistent with that expressed by SDP Drake in Strauss v Patrick Projects Pty Ltd 95 when she stated:
“In this case the ramp down of the respondent’s work on the Chevron project had occurred and was a genuine operational reason for the reduction of staff … .”
[114] In UES (Int’L) Pty Ltd v Harvey 96 the Full Bench examined the application of s.387(a) of the Act and the majority held that a termination through redundancy was not relevant to s.387(a) of the Act:
“(26) We have concluded, however, that s.387(a) of the FW Act regarding the matter of whether there was a valid reason for the dismissal related to the person’s capacity or conduct does not go to the process for selecting the person for redundancy.”
[115] As such, this is not a factor of relevance with respect to whether the applicants’ dismissals were harsh, unjust or unreasonable.
(b) Whether the person was notified of that reason
[116] As stated above, the applicants’ dismissals did not relate to their capacity or conduct. The applicants were advised at the consultation meeting on 22 January 2014, that a reduction of the workforce was needed following an instruction by the contract principle and that redundancies would occur.
(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct
[117] This criterion deals with procedural fairness in respect of a reason for dismissal related to an employee’s capacity or conduct. The applicants’ employment was not terminated for reasons related to their capacity or conduct.
(d) Any unreasonable refusal to allow the person to have a support person present to assist at any discussions relating to dismissal
[118] There was no refusal by the respondent for the applicants to have a support person to assist in any discussions relating to their redundancies.
(e) If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[119] The dismissal did not relate to unsatisfactory performance by any of the applicants.
(f) (g) 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 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
[120] There was no evidence of an absence of dedicated human resource management specialists or expertise likely to impact on the procedures followed in effecting the redundancies.
(h) Any other relevant matters
[121] The applicants’ redundancies occurred on 20 March 2014 (based on the first on last off principle) and they became part of the normal downsizing of work which was being performed to support a construction project. Given the evidence of Mr Burton in relation to the operational need to restructure following a reduction in the Schedule of Works, the applicant’s redundancies were inevitable.
[122] As Watson VP stated in Mr Jamil Maswan v Escada Textilvertrieb T/A ESCADA at [39]:
“In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in procedure such that renders the termination unfair in the circumstances. ...”97
[123] Having found that a valid reason existed for the applicants’ dismissals and balancing all of the relevant considerations under s.387 of the Act, the circumstances of the redundancies do not support a conclusion that the applicants’ dismissals were harsh, unjust or unreasonable.
[124] Accordingly, the applicants’ claims for an unfair dismissal remedy are dismissed based on the dismissals being genuine redundancies and that the dismissals were not harsh, unjust or unreasonable.
DEPUTY PRESIDENT
Appearances:
Mr C Strauss on behalf of the applicants
Mr D Fletcher and J Parkinson solicitors, K & L Gates, on behalf of the respondent
Hearing details:
2017
23 October
2018
June 18, 19, 20, 21
August 20, 21
September 6, 7, 10
November 9
December 20
1 Mr Strauss did not seek leave to appear as a paid agent
2 [2016] FWC 4189 and 2018 FWC 3514
3 See Directions of SDP Drake 23 January 2017 PR589631
4 See clause 8 of the Agreement
5 The respondent’s Outline of Submissions 21 July 2016, Mr Seiffert’s F2 states he was employed on 12 March 2012.
6 Liquid natural gas
7 Witness statement of Mr Burton Ex R6 at [17] – [20]
8 Both dated 20 December 2018
9 Both were received on 25 January 2019
10 Ex A13
11 This submission was also addressed in part in a decision involving the parties issued on 18 December 2018 [2018] FWC 7679
12 Amended Supplementary Submissions at [9] and [16]
13 ResMed Limited v Australian Manufacturing Workers’ Union [2015] FCA 379 at [48]
14 See paragraphs [133(b) and (c)] and [145(c)]
15 Ex A13
16 PN147
17 Annexure A17 to witness statement Exhibit A1, PN320
18 Annexure A23 to witness statement Exhibit A1
19 PN268, PN1109
20 PN818
21 PN1276
22 PN811
23 PN901, PN936
24 PN1618
25 PN1874
26 PN2366 , PN2455
27 PN2392, PN2414
28 PN2443
29 PN2940
30 PN2914, PN2920, PN3250
31 PN2942, PN2945, PN3001
32 PN3907
33 PN7110
34 PN6848
35 PN6859
36 PN6854
37 PN6875
38 PN4042
39 PN4307
40 PN4092
41 pN5184
42 PN4600
43 PN5442-3
44 PN5167
45 PN6595
46 PN6602
47 PN6660
48 PN5515
49 PN5733
50 Exhibit A12
51 Written submissions of 20 December 2018 at [4-5]
52 Ibid at [48]
53 Ibid at [60]
54 Ibid at [54]
55 Ibid at [58]
56 Written submissions 20 December 2018 at [62.13]
57 Ibid at [64], [62.7]
58 Applicants’ Outline of submissions 2 October 2017 at [9](f)
59 Ibid at [62.6]
60 Written submissions 25 January 2019 at [18]
61 Joint Venture with KBR, JGC, Clough, and Hatch
62 DP 12 of Ex R6
63 22 January 2014 slide presentation
64 PN9030, PN9035 and at [38](d) of Witness Statement Ex R6
65 PN8183, PN9030, PN9035, PN9054
66 PN8192
67 PN9462
68 Witness Statement Ex R6 at [54]
69 PN8958, PN8349
70 PN8743
71 PN8634
72 PN8839
73 PN8848
74 PN9099
75 PN9459
76 PN8766 -8768, 8778-8780, 8786
77 PN8866
79 [2013] FWC 5636 at [8]
80 Written submissions 21 July 2017 at [7.7]
81 PN8812
82 PN9462
83 [2017] FWC 1574 at [90]
84 See slide titled Ongoing Support of 22 January 2014
85 Acknowledging Mr Seiffert did not attend the 22 January 2014 employee briefing
86 See Macleod v Alcyone Resources Ltd [2014] FWCFB 1542 at [31]
87 Submissions in reply 19 October 2017 at [33] (a)
88 [2016] FCA 1110
89 King v Patrick Projects Pty Ltd [2016] FCA 1479
91 PN1467
92 Witness statement of Mr Burton Ex R6 at [54], email from Mr Stutley to Commission 11 April 2018
94 UES (Int’L) Pty Ltd v Harvey [2012] FWAFB 5241
95 [2017] FWC 1574 at [49]
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