FWA 4548
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
DEPUTY PRESIDENT HAMILTON
MELBOURNE, 2 JULY 2010
Application for unfair dismissal remedy. Was there a genuine redundancy?
 On 24 February 2010, Mr Anthony Markac lodged an application under section 394 of the Fair Work Act 2009 (the Act) on the ground that the termination of his employment was unfair.
 Conciliation on 17 March 2010 was unsuccessful.
 The employer submitted that Mr Markac was not unfairly dismissed, and that it was a case of genuine redundancy. The applicant denied this.
 The matter was listed for a jurisdiction/arbitration hearing before me on 8 June 2010.
 The applicant, Mr Anthony Markac was represented by Mr G Dircks, and the respondent, CSR Limited trading as Viridian New World Glass was represented by Mr R Ironmonger.
 Witness statements were tendered without objection for :
 I was told that there were no real evidentiary issues between the parties, and the witness evidence was accordingly accepted without the parties requiring any of the witnesses to be called for cross examination 1. Written submissions were filed and I have had regard to the submissions and evidence before me.
 In this matter the employer submits that the dismissal was a genuine redundancy within ss.385(d), and 389, and for that reason the application should be dismissed. This was the employer’s only defence to the application 2. The applicant submitted that the dismissal was not a genuine redundancy, and that the application should be granted.
 Sections 385 and 389 relevantly provide:
‘385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.’
‘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.’
 In Ulan Coal Mines Limited v. Henry Jon Howarth 3 a Full Bench considered these new provisions in the context of a matter in which 38 mineworker positions and others were determined to be surplus to requirements, although non-trades mine work was still done by someone, and there was reallocation of work. The Bench said:
‘ The changes in the operational requirements at the mine included changes in the composition of the workforce, in the tasks and functions that would be performed by contractors and employees, and in the number and skills mix of mineworkers required to be employed. As a consequence of the changes it was determined that there were a number of non-trades mineworker positions that were surplus to requirements as they were no longer needed for the Company’s operations. Ultimately it was decided that 14 permanent non-trades mineworkers would have to be retrenched. The basis on which mineworkers were selected for redundancy was seniority, as provided under the Agreement. They were not selected according to any individualised approach based on the particular position or work being performed by them whether in underground crews or in surface functions. The need to reduce the overall number of non-trades mineworkers, together with the application of the seniority principle for selection, meant that mineworkers from different parts of the operations would be retrenched and that other mineworkers might need to be reallocated into available mineworker jobs.
 These were the circumstances in which it was necessary to consider the meaning and application of the relevant statutory provisions and, in particular, the expression “the person’s employer no longer required the person’s job to be performed by anyone” in s.389(1)(a) of the Act. These words have long been used and applied in industrial tribunals and courts as a practical definition of redundancy (see e.g. R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Cooperative Limited (1977) 16 SASR 6; Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115; Short v F.W. Hercus Pty Limited (1993) 40 FCR 511). They have also been adopted in the National Employment Standards provided under the Act in dealing with entitlements to redundancy payments (see s.119).
 The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will be a case of genuine redundancy:
“1547 Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548 The following are possible examples of a change in the operational requirements of an enterprise:
 It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
 In Kekeris v A. Hartrodt Australia Pty Ltd  FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” (at par )
 In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the “jobs” of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 non-trades mineworker positions which were surplus to the Company’s requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.
 These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.’
 In this case Mr. Westwood 4 gave evidence that the number of positions were surplus to projected future needs at Viridian, a division of CSR Building products. He said that numbers needed to be reduced to a target of 370 for all Viridian locations, which was still higher than the ideal target number of 350 based on productivity at other locations. Viridian Victorian State business will lose $10 million by the end of March 2010, and he was given the challenge of fixing the business. The first step was to reduce the number of heads in the Victorian Viridian Glass Processing & Services Division by 70.
 Mr.Findlay 5 gave similar evidence about cost pressures and numbers to be reduced. He said that the process of selection for redundancy was discussed with the union on 2 February 2010, representatives from the CFMEU attending. A process of selection was agreed with the union. A memorandum was posted on notice boards advising all production employees of the process that would be adopted to make people redundant. All interested employees were to complete a form and give it to the company. Supervisors reviewed people against a skills matrix and made their selections, and people were then advised on 12 February 2010 of their selection for redundancy.
 A bundle of materials was tendered by Viridian without opposition or objection 6 to explain the process of expressions of interest, skill assessments and then forced redundancies undertaken by Viridian in this matter (Exhibit CSR1). The applicant asked the tribunal to issue an order to produce these documents, and they were produced by Viridian in answer to the order. The applicant sought to rely on some of these documents in its submissions7. These documents included a list of new employees employed by Viridian Victorian Operations, and a document headed ‘ranking tool’, which listed employees and gave each employee a number opposite terms such as ‘reliability’ and other apparent tests of skills and suitability for employment. Mr.Markac was listed as it appears ‘Mr.Marac’, and was given a very low skills score compared to other employees.
 Mr.Markac gave evidence 8 that he worked on the Straightline glass polishing machines. He said that 150 staff applied for redundancy but that only 50 were accepted. He said that he was told about the redundancies by a new boss, Alan, who told him that new skill matrix would be developed and used to select redundant employees based on skills, and the CFMEU was present. He said that casuals were put on, but this and a number of similar statements are hearsay in nature and it is difficult to place much weight on them. He said he was made redundant at a meeting on 12 February 2010 between himself, Kim, a manager, Troy, night shift coordinator, and Peter the union delegate (who was made redundant). The fact that some employees are put on does not mean that there was not a situation of genuine redundancy.
 On the material before me, firstly, it is not in contention that Viridian underwent a major redundancy process due to the economic position of the company. Secondly, it is not in contention that Mr.Markac was selected by Viridian for redundancy. Thirdly, it appears that he was selected for redundancy on the basis of the application of the document in Exhibit CSR1 headed ‘ranking tool’, in which he was ranked poorly on tests such as teamwork/communication, service/productivity, communication, organisation and planning, reliability, initiative/continuous improvement, problem solving/judgement, attitude towards changes/adaptability, task basic knowledge, follow procedure, process ownership, technical ability. The document was tendered without objection, it gives Mr.Markac a low score, and I have been given little reason to doubt that this was the test used to select Mr.Markac for redundancy. It is the sort of test often applied and on the material before me is sufficient despite some limited criticism by the applicant in reply 9. Fourthly, while others continued to work on the Straightline glass polishing machine it is not in contention that overall there was a need to reduce employees by a substantial amount because of the economic position of the company and lack of productivity and the company losses.
 This is a genuine redundancy of the usual kind known for some time in industrial law: R v. Industrial Commission of South Australia (1977) 16 SASR 6; Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115. Such decisions are now reflected in the provisions of s.389(1)(a).
 Because of the economic position of the firm fewer process worker jobs were required overall at Viridian, and for that reason, the jobs of Mr.Markac and others selected for retrenchment and redundancy could be said to no longer exist. If this is not a redundancy I am not sure what would be a redundancy. If I were to find that it was not a genuine redundancy but simply a mystifying dismissal for no reason, it would fly in the face of the uncontested material before me, including evidence from Mr.Markac. The submissions from Viridian make sense of the evidence, while those of the applicant seem to yield an unlikely and odd result, which is that a company undertaking relatively large scale redundancies for economic and cost reasons not in dispute terminates the employment of Mr.Markac on the basis of his poor skills scoring while telling him that he is redundant and this inexplicably has nothing to do with a genuine redundancy. The fact that others work on the machine that Mr.Markac worked on does not change the position, as it did not change the position in Ulan Coal. I am satisfied that the requirements of s.389(1)(a) are met.
 The question then arises of whether Viridian has complied with the requirements of s.389(1)(b), and has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
 Mr.Dircks for the applicant submitted that the Don Mathiesson & Staff Glass Pty Ltd (Manufacturing Operations), Enterprise Bargaining Agreement 2004-2007 10 applies in lieu of any award provision because it contains a redundancy procedure (Appendix B) which applies as inconsistent with any award provisions as to consultation (clause 6(a))11. Appendix B sets out the requirements as to redundancy. The employer agrees to do certain things, such as to advise those employees who will be affected, and their respective union as early as possible. It also deals with alternative positions by providing that an employee who finds an alternative position during the notice period may terminate early. On the basis of the evidence of Messrs.Findlay, Westwood and Markac Viridian has complied with obligations in Appendix B, for example by providing an announcement of redundancies and then seeking an expression of interest from employees.
 With respect to s.389(2), I am unable to find that it would have been reasonable in all the circumstances for Mr.Markac to be redeployed within the employer’s enterprise or an associated entity. There is nothing to persuade me that this would have been reasonable in all the circumstances, and there was a submission put by Viridian specifically on the issue which is persuasive in the circumstances 12.
 The requirements of s.389 are complied with. I am required to dismiss the matter. An order dismissing the application is contained in PR998709.
Mr G Dircks for the applicant.
Mr R Ironmonger for the respondent.
3  FWAB 3488, Boulton SDP, Drake DP, McKenna C, 10 May 2010
4 Exhibit CSR3
5 Exhibit CSR2
8 Exhibit M1
10 AG837651 PR984304
12 Outline of Submissions for the Respondent, paragraph 7
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<Price code C, PR998413>