[2013] FWCFB 8936

FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.604 - Appeal of decisions

Roy Morgan Research Ltd
v
K Baker
(C2013/6194)

SENIOR DEPUTY PRESIDENT WATSON
DEPUTY PRESIDENT HAMILTON
COMMISSIONER LEE

MELBOURNE, 20 NOVEMBER 2013

Appeal against decision [[2013] FWC 6694] of Deputy President Gooley at Melbourne on 6 September 2013 in matter number U2013/539 - permission to appeal refused.

[1] Pursuant to s.604 of the Fair Work Act 2009 (the Act), Roy Morgan Research Ltd (the Appellant) has appealed a decision 1 and order2 of Deputy President Gooley of 6 September 2013 in which the Deputy President found that:

• the termination by the Appellant of the employment Ms K Baker (the Respondent) was not a case of genuine redundancy within the meaning of s.389 of the Act;

• the termination was harsh, unjust and unreasonable; and

• the Respondent had been unfairly dismissed.

[2] Deputy President Gooley ordered the payment by the Appellant of compensation to the Respondent of $37,000 less applicable taxation.

[3] The appeal is directed wholly to the finding by Deputy President Gooley that the termination by the Appellant of the employment of the Respondent was not a case of genuine redundancy within the meaning of s.389 of the Act.

GENUINE REDUNDANCY

[4] Section 385 of the Act provides that a person has been unfairly dismissed if the Fair Work Commission (the Commission) 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.”

[5] Section 389(1) of the Act provides that 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.”

[6] However, s.389(2) of the Act provides that 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.”

DECISION OF DEPUTY PRESIDENT GOOLEY

[7] Deputy President Gooley was “unable to find that Ms Baker’s position was made redundant because of changes” in the Appellant’s operational requirements. 3

[8] In reaching that conclusion in respect of s.389(1)(a) of the Act, Deputy President Gooley set out the evidence and made findings in relation to it. 4 Much of that evidence was that of Mr S Schwarz, the Human Relations (HR) Manager for the Appellant, who made the decision to restructure the HR department and make the Respondent’s position redundant. Deputy President Gooley concluded, on the basis of that evidence:

[21] There is no doubt that Roy Morgan is entitled to decide that it wants different roles performed by its HR staff and, if they did not have the competency to do the work, to restructure its HR team but Roy Morgan must produce evidence to the Fair Work Commission (the Commission) of its operational reasons for doing so.

[22] A desire to do things differently is not enough. To establish that there were changes in the operational requirements of the business, there needs to be more than assertions. Mr Schwartz gave no evidence about what were the changes in the operational requirements of the business that required the creation of the Learning and Development position and the abolition of the job being performed by Ms Baker.

[23] The onus is on Roy Morgan to establish on the balance of probabilities that there were operational reasons. The evidence presented falls well short of what is required to meet that standard of proof. Ray Morgan has failed to meet that onus.

[24] I am unable to find that Ms Baker’s position was made redundant because of changes in Roy Morgan’s operational requirements.

[9] Deputy President Gooley also concluded that the Appellant did not comply with its obligation to consult with the Respondent, 5 as required in s.389(1)(b) of the Act. In respect of this finding, the Deputy President’s reasoning was as follows:

[25] The Agreement contains the model consultation clause and Roy Morgan accepts it had an obligation to consult.

[26] On 8 January 2013, Mr Schwartz told Ms Baker that the position of ASTEROID Trainer was being made redundant and that a new position of Learning and Development Lead would be created. He told her she could apply for that position and that she would be offered participation in the redeployment programme but if no suitable position was found her employment would be terminated. There was no suggestion in Mr Schwartz’s evidence that this conversation involved consultation about the decision.

[27] As the then Commissioner Smith said, “consultation is not perfunctory advice on what is about to happen. This is common misconception. Consultation is providing the individual, or other relevant persons, with the bona fides opportunity to influence the decision maker.”

[28] In this case there is nothing in the evidence that suggested that Mr Schwartz consulted with Ms Baker after he had made the decision to make her position redundant. While I accept that Mr Schwartz told Ms Baker when he had made the decision, there is no evidence that he “discussed” this change with her. What was being discussed was the implementation of the decision and the consequences for Ms Baker. There was no real opportunity for Ms Baker to change his mind.” [footnotes omitted]

APPROACH TO THE APPEAL

[10] The approach to an appeal in the context of s.389 of the Act was considered by a Full Bench in Ulan Coal Mines Limited v Honeysett and Others 6 as follows:

[11] We apply that approach.

Consideration

[12] The appeal raises two issues concerning whether the dismissal of the Respondent was not a case of genuine redundancy within the meaning of s.389(1) of the Act:

• Section 389(1)(a): whether the Appellant no longer required the Respondent’s job to be performed by anyone because of changes in the operational requirements of its enterprise; and

• Section 389(1)(b): whether the Appellant complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

[13] Deputy President Gooley was not satisfied on the evidence before her that the requirements of either ss.389(1)(a) or (b) were met. Either finding was sufficient to sustain a finding that the dismissal of the Respondent was not a case of genuine redundancy. As a result, the Deputy President was not required to make a finding in relation to s.389(2) of the Act. In this respect, she concluded:

“Given my findings that, Mr Schwartz’s decision to make Ms Baker’s position redundant was not because of operational requirements and that consultation as required by the Agreement did not occur, it is not necessary to determine if redeployment would have been reasonable.” 7

A. Section 389(1)(a): Whether the Appellant no longer required the Respondent’s job to be performed by anyone because of changes in the operational requirements of its enterprise

Submissions of the parties

[14] The Appellant submitted that Deputy President Gooley erred in exercising her discretion by failing to take into account material considerations and evidence. It submitted that:

[15] The Appellant submitted that Deputy President Gooley appeared to have completely disregarded Mr Schwarz’s evidence, without providing reasons for doing so.

[16] The Appellant further submitted that Deputy President Gooley erred in finding that the onus is on the employer relying on the genuine redundancy argument to establish on the balance of probabilities that there were operational reasons for the redundancy, the evidence presented “falls well short” of what was required to meet that standard of proof, she was unable to find that the position was made redundant due to operational reasons and there is no evidence to support a finding that the reasons for termination were sound, defensible or well founded.

[17] The Respondent submitted that the Appellant’s appeal grounds do not include particulars of any alleged appealable error but merely contain a general allegation of error. It submitted that before Deputy President Gooley the Appellant relied upon general assertions and the ability of its HR Manager, Mr Schwarz, in the decision making and failed to bring detailed credible evidence as to the central matters in issue. The Respondent submitted that the Appellant continued this approach in the appeal, submitting that assertions, without detailed or credible evidence, and the mere fact that the decision was allegedly made by an experienced HR professional, are sufficient to meet the requirements of proof in relation to s.389 of the Act.

[18] The Respondent also submitted that s.389(1)(a)(1) of the Act raises a question as to the assessment of the nature and treatment of the evidence, about which guidance as to the approach to s.643(8) of the Workplace Relations Act 1996 (the WR Act) was sought. It contended that such guidance is found in the approach of Full Benches in Boeing Australia Limited v B Acworth, 8 Village Cinemas Australia Pty Ltd v Carter9 and A Cruickshank v Priceline Pty Ltd,10 applied by Commissioner Gay in W Stannard v CSIRO.11

[19] The Respondent further submitted that Deputy President Gooley correctly found that there was a lack of evidence to support a finding that the decision to terminate was due to the operational requirements of its enterprise.

Decision in relation to s.389(1)(a)

[20] A central question in the Appellant’s challenge to the finding of Deputy President Gooley in relation to s.389(1)(a) of the Act - that she was unable to find that the Respondent’s “position was made redundant because of changes in Roy Morgan’s operational requirements” 12 - concerns the basis for satisfaction by the Commission for that finding.

[21] In that respect the Deputy President found:

[22] . . . To establish that there were changes in the operational requirements of the business, there needs to be more than assertions. Mr Schwarz gave no evidence about what were the changes in the operational requirements of the business that required the creation of the Learning and Development position and the abolition of the job being performed by Ms Baker.

[23] The onus is on Roy Morgan to establish on the balance of probabilities that there were operational reasons. The evidence presented falls well short of what is required to meet that standard of proof. Ray Morgan has failed to meet that onus.”

[22] Although decided in a different statutory context, Full Bench decisions with respect to s.638(1)(a) of the WR Act provide guidance as to the basis on which the Commission can be satisfied of the requirements of s.389(1)(a) of the Act. Section 643(8) of the WR Act excluded an application for relief in respect of the termination of employment on grounds that include that ground, if the employee’s employment was terminated for genuine operational reasons or for reasons that include genuine operational reasons.

[23] In Village Cinemas, 13 the Full Bench stated:

[40] An applicant for relief bears the onus of proving all the elements necessary to establish his claim. This includes satisfying the Commission that it has jurisdiction to deal with the matter. Where, as in this case, the respondent asserts that the application is precluded by operation of s.643(8), the respondent bears the evidentiary onus of persuading the Commission that the termination of employment of a particular employee was for genuine operational reasons or for reasons that include genuine operational reasons. It is in that context that a mere assertion by an employer to that effect will usually not be sufficient to discharge the evidentiary onus. What evidence will suffice will vary from case to case depending on the circumstances.”

[24] In Priceline, 14 the Full Bench observed:

[5] Another element of ss.643(8) and (9) is that the operational reasons must be ‘genuine.’ The use of the adjective ‘genuine’ serves to indicate that the reasons advanced must be genuinely held and must be capable of withstanding reasonable scrutiny. It would not be sufficient that an employer had a sincere belief that a termination was for operational reasons unless it could also be shown that the reasons were ‘genuine in the sense that [they were] real, true or authentic, not counterfeit’ as explained in Village Cinemas Australia Pty Ltd v Carter. [[2007] AIRCFB 35 at 26].

. . .

[9] Where the procedure in s.649 applies, therefore, the question is whether the Commission is ‘satisfied’ that any operational reasons advanced by the employer for the termination are genuine reasons. While there is no presumption to the contrary, unless the employer produces evidence of the reasons for the termination and persuades the Commission they are or include genuine operational reasons, the jurisdictional objection will fail. Questions of onus may arise but they are unlikely to play a large part in the decision-making process. The question ultimately is whether the Commission is satisfied, on the evidence and material presented to it by the parties, that there were genuine operational reasons.

[10] Speaking generally the reasons for termination of employment are the reasons of the decision-maker. In many cases the decision-maker will be easily identifiable. In other cases the situation may not be straight forward. For example the decision may have been taken by a group such as a committee. In any event the evidence of the decision-maker, or decision-makers if there are more than one, will be pivotal.

. . .

[14] . . . To ascertain the reasons for an employer’s decision to terminate an employee’s employment, it is necessary to focus on the reasons, if any, advanced by the decision-maker. It is clear that the credibility of evidence given by the decision-maker may be put in issue in some cases. If this occurs the Commission will be required to evaluate the evidence given by the decision-maker against.”

[25] In Boeing Australia, 15 the Full Bench found that:

[6] When a respondent employer moves for the dismissal of an application pursuant to s.649(1)(b)(i), s.649(2) requires the Commission to examine the operational reasons relied on by the respondent employer and to decide whether those reasons were genuine. It follows that the focus of the inquiry is two-fold. It requires the identification of the reasons relied upon by the employer and an evaluation of their genuineness. In a forensic sense reasons relied on by the employer might not be genuine because they were not real reasons for the termination or, while being genuine reasons, they may not be operational ones.

[7] In considering whether a termination was for genuine operational reasons the employer’s reasons for dismissal are the critical consideration. In Cruickshank v Priceline [[2007] AIRCFB 513] the Commission drew attention to the particular importance of the reasons advanced by the decision-maker. . .”

[26] It is sufficient, for the purposes of the current appeal, to draw from those authorities, that s.389(1)(a) of the Act requires the Commission to consider the evidence in relation to the changes in operational requirements relied on by the employer and reach a conclusion as to whether the changes were such that it no longer required the employee’s job to be performed by anyone. A positive finding in relation to s.389(1)(a) would require satisfaction by the Commission on the evidence and material presented to it by the parties, that the employer no longer required the employee’s job to be performed by anyone because of changes in the operational requirements of its enterprise.

[27] As was noted by Deputy President Gooley, 16 the Appellant is entitled to restructure its HR team. However, if it wishes to contest an application for relief in respect of the termination of an employee made redundant as a consequence on the basis that the redundancy was due to the changed operational requirements of its enterprise (ss.385(d) and 389(1) of the Act), it must produce evidence to the Commission to support such a proposition, including evidence of the changed operational requirements.

[28] We have carefully considered the evidence brought by the Appellant before Deputy President Gooley, including that of the decision maker, Mr Schwarz and Ms Levine, who approved the restructure proposed by Mr Schwarz.

[29] Having regard to that evidence before Deputy President Gooley, we find that the Appellant put no evidence about changes in the operational requirements of the business which supported the creation of the Learning and Development Lead position and the abolition of the job being performed by the Respondent (whether the ASTEROID Trainer position or the position of a generalist trainer and/or supporting the HR team in an administrative capacity). No evidence was given as to competency gaps within the HR team which supported the creation of the Learning and Development Lead position in order to meet operational requirements. No evidence was brought as to the business’ training needs or the competencies of the existing HR staff. No evidence was given as to the sustainability of the Respondent’s position at the time of the restructure, in addition to the Learning and Development Lead position, having regard to the operational requirements of the Appellant. As noted in Village Cinemas, what evidence will suffice to support a finding will vary from case to case depending on the circumstances. In the current case, we find that the evidence brought by the Appellant in respect of its operational requirements and the restructure was extraordinarily limited and barely addressed the proposition that the Appellant no longer required the Respondent’s job to be performed by anyone because of changes in the operational requirements of its enterprise. It did not provide an evidentiary basis for a finding to that effect.

[30] We find that Deputy President Gooley applied the right approach to the question arising under s.389(1)(a) of the Act and reached the right conclusion in rejecting the proposition that the Appellant no longer required the Respondent’s job to be performed by anyone because of changes in the operational requirements of its enterprise. No error, significant or otherwise, is evident in the decision of Deputy President Gooley in relation to s.389(1)(a). The matter was correctly decided. No basis for permission to appeal has been made out.

B. Section 389(1)(b): Consultation required by clause 33 of the Roy Morgan Research Enterprise Agreement 2009-2013 (the Roy Morgan Agreement) 17

[31] The Appellant alleged error on the part of Deputy President Gooley in relation to whether the Appellant had complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy:

1. The Deputy President Gooley failed to take into account material considerations;

2. The steps taken by Mr Schwarz constitute consultation, and unquestionably involved discussing (in accordance with clause 33—Consultation, of the Roy Morgan Agreement with the Respondent:

[32] The Respondent submitted that clause 33 of the Roy Morgan Agreement requires consultation and is, formatting aside, in the terms of the standard consultation clause, reflected in the model consultation term. 18

[33] The Respondent submitted that relevant case 19 law establishes that the discussions envisaged in the consultation term of the agreement are to take place before the number of terminations is finalised and particular employees to be retrenched are identified, in order to allow the employees an opportunity to influence such decisions and put proposals to avoid and minimise the terminations and mitigate adverse effects.

[34] The Respondent submitted that in K Monks v John Holland Group Pty Ltd, 20 it was found that by the time the consultation meeting occurred, a definate decision to make the relevant employee’s position redundant had been made, a decision to create a new position had been made and it had been determined that the relevant employee would not fill the new position. It was found that there was no opportunity at that meeting for the relevant employee to change the employer’s decision.

[35] The Respondent noted similar observations by Vice President Watson in Wang and Others v Specialty Fashion Group Ltd 21 and J Maswan v Escada Textilvertrieb T/A ESCADA.22

[36] The Respondent submitted that the appropriate time for consultation under clause 33 in the Roy Morgan Agreement in the current case, was after the employer had made a definite decision to undertake a restructure but before particular decisions had been taken as to the new positions to be created and the employees or positions to be made redundant. In this case the decision was made to restructure and at the same time to make the position of the Respondent redundant. The Respondent was only advised of the decisions after they had been made. The evidence shows that there was no consultation at all in relation to the restructure and the redundancy of the Respondent’s position and there is no evidence of the provision of the particular information required to be provided, verbally or in writing, to the Respondent under clause 33 of the Roy Morgan Agreement. Deputy President Gooley was right to find that the Appellant had not complied with its obligation to consult with the Respondent under the Agreement.

Decision in relation to s.389(1)(b)

[37] There is no question that the Roy Morgan Agreement applied to the Respondent’s employment and that clause 33 imposes an obligation on the Appellant to consult about the redundancy. In substantive terms, clause 33 is in the same terms as the model consultation term.

[38] Mr Schwarz decided to create a new Learning and Development Lead position by 4 January 2013, discussing it with and obtaining approval from Ms Levine on that date. 23

[39] At a meeting with the Respondent late on 8 January 2013 and in a letter of 9 January 2013 provided to the Respondent, Mr Schwarz informed the Respondent of his decision to create the new position, his decision to make the Respondent’s position redundant and the consequent options available to the Respondent to apply for the new position and/or participate in the Roy Morgan redeployment program. Mr Schwarz advised Ms Levine in an 8 January 2013 email that he would “chat” with the Respondent and inform her that her role is being made redundant and to invite her to apply for the new position or enter the redeployment process. 24 There is nothing in Mr Schwarz’s evidence about the meeting to support a finding that the meeting proceeded other than in that manner. The Respondent’s first witness statement25 confirms that this is what occurred at the 8 January 2013 meeting - the Respondent was advised that the role of ASTEROID Trainer was being made redundant, because of the creation a new position of Learning and Development Lead which would incorporate the ASTEROID training, invited to apply for the new position or enter the redeployment processes.

[40] In his 9 January 2013 letter to the Respondent, 26 Mr Schwarz followed up the 8 January 2013 conversation, confirming that the Appellant would shortly commence recruitment for the Learning and Development role and explaining that the nature of that role was such that the Respondent’s ongoing role of ASTEROID Trainer was no longer required and would be made redundant. The letter also had attached a copy of the position description for the new position, invited the Respondent to apply or, if she did not apply, to participate in the Roy Morgan redeployment program and the process involved.

[41] The 8 January 2013 discussion and the 9 January 2013 letter went no further than to advise the Respondent of the restructure and the redundancy of her position and the options open to the Respondent consequent upon the restructure.

[42] Any further contact between Mr Schwarz and the Respondent concerned application for the new position and participation in the Roy Morgan redeployment program and the processes of that program, dealing with processes subsequent to and consequential to her position being made redundant.

[43] Deputy President Gooley’s summation of the evidence and her finding that there was no suggestion in Mr Schwartz’s evidence that the 8 January 2013 conversation involved consultation about the decision 27 properly reflects the evidence before her, as does her finding that:

“While . . . Mr Schwartz told Ms Baker when he had made the decision, there is no evidence that he “discussed” this change with her. What was being discussed was the implementation of the decision and the consequences for Ms Baker. There was no real opportunity for Ms Baker to change his mind.” 28

[44] No error, significant or otherwise, is evident in the decision of Deputy President Gooley in relation to s.389(1)(b). Deputy President Gooley correctly decided the issue. No basis for permission to appeal has been made out.

CONCLUSION

[45] We refuse permission to appeal.

[46] The stay order of 2 October 2013 29 is discharged by its own terms. The stay order required the Appellant to pay the compensation ordered by Deputy President Gooley less applicable taxation into the Respondent’s solicitors trust account pending the determination or discontinuance of the appeal. The Appellant is now required to pay the compensation ordered, together with interest earned arising from the stay order to the Respondent. The Appellant and the Respondent’s representative should confer about arrangements for the compensation and interest to pass from the Respondent’s solicitors trust account to the Respondent to meet the obligations of the Appellant, with recourse to the Full Bench if required.

SENIOR DEPUTY PRESIDENT

Appearances:

J Yeatman for the Appellant.

N Campbell of Counsel for the Respondent.

Hearing details:

2013.

Melbourne:

November 13.

 1   [2013] FWC 6694.

 2   PR541442.

 3   [2013] FWC 6694, at para 24.

 4   [2013] FWC 6694, at paras 3-20.

 5   [2013] FWC 6694, at para 29.

 6   [2010] FWAFB 7578.

 7   [2013] FWC 6694, at para 38.

 8   [2007] AIRCFB 730, at para 6.

 9   [2007] AIRCFB 35, at paras10 and 14.

 10   [2007] AIRCFB 513, at para 5.

 11   [2008] AIRC 456, at paras 47-50 and 56-57.

 12   [2013] FWC 6694, at para 24.

 13   [2007] AIRCFB 35.

 14   [2007] AIRCFB 513.

 15   [2007] AIRCFB 730.

 16   [2013] FWC 6694, at para 21.

 17   AE874561 PR994600.

 18   Fair Work Regulations 2009, Schedule 2.3.

 19   Ulan Coal Mines Limited and Howarth and Others [2010] FWAFB 3488.

 20   [2012] FWA 6453, at paras 33-38.

 21   [2011] FWA 6872, at para 27.

 22   [2011] FWA 4239, at paras 19-20.

 23   Transcript, at paras 1575-1583 in U2013/539.

 24   Exhibit A11, in U2013/539.

 25   Exhibit A1, in U2013/539.

 26   Exhibit R1, Attachment C in U2013/539.

 27   [2013] FWC 6694, at para 26.

 28   [2013] FWC 6694, at para 28.

 29   PR542815.

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